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Sponsored Programs Procedure for Budgeting for Reimbursement of Capped Salaries

NIH is prohibited by a provision in the DHHS Appropriations Act from reimbursing as a direct charge to a grant or contract salary payments which exceed the salary for Executive Level II of the Federal Executive Pay Scale. As of March 3 2004, salary reimbursements may not exceed an annual rate of $175,700. The process recommended by NIH for implementation of the salary cap calls for applicants who include categorical budgets to calculate salary requests on actual institutional base salary, even when the institutional base salary exceeds the NIH cap. If applicants include an actual institutional base salary that exceeds the cap, in any resulting award the awarded salary will be reduced to the cap in effect at the time of the award. In actuality, adjustments in awarded salary will be made only when an award is being processed in a year in which the cap is adjusted. Since, in the eleven-year history of the cap, only two adjustments have been made, years in which the adjustments will be made will be rare. Moreover, the adjustment would be quite small ($3,059 in total cost reimbursement for 10% effort). In preparing modular grant applications, an unanticipated effect of submission of actual institutional base salary became apparent. In several cases, inclusion of actual institutional base salary drove the total proposed cost above the limit for submission of modular proposals. Thus, the PI's were faced with the additional burden of developing a detailed budget only to accommodate the actual institutional base salary even though any resulting award would include the capped salary and be at or below the limit for modular awards.
Thus, on balance, considering the rarity of cap adjustments, the size of cap adjustments, and the additional burden on PI's when inclusion of actual institutional base salaries drives the total proposed cost over the modular limit, salaries exceeding the NIH cap will be budgeted at the capped rate and will not be incremented for future years.


  1. This procedure applies only to NIH proposals.
  2. Determine which of the proposed personnel have actual institutional salaries which will exceed the NIH cap during the first requested budget period.
  3. For each such person, use the NIH capped salary rate in effect at the time of submission as the base for calculating salary reimbursement.
  4. Do not increment the capped salary in years beyond the first budget period.


Salary Information

The portion of faculty salary and fringe benefits that corresponds to effort committed to an externally sponsored project may be included in, and recovered from, the project budget. When recovered, the salary and fringe benefits are reimbursed to the University through an Income Fund Reimbursable (IFR) mechanism at appropriate current rates. For further information on budgeting for salaries, please see also Chapter Five of the SPA Guide to Guide to Developing and Administering Sponsored Programs. For information on budgeting salaries that are over the NIH salary cap, please click here.

For information on Fringe Benefits that must be budgeted with salaries, please click here.

Salary Increases

Salary increase schedules:
  • University faculty members holding academic year appointments: September 1
  • University faculty and staff holding calendar year appointments: July 1.
  • Research Foundation employees: either July 1, the project anniversary date, or the employee's anniversary date.
Salary increase amounts:
  • Salaries for 2005 should be budgeted assuming a 3.75% annual increase.
  • Salaries for 2007 and beyond should be budgeted assuming a 4.0% annual increase.
  • Actual salary payments will be consistent with current University, RF, and UBFS salary policies.

Period of Academic Commitment:

Academic Year 04/05 August 30, 2004 through May 15, 2005
Academic Year 05/06 August 29, 2005 through May 14, 2006
Summer Salary may only be budgeted for periods outside of the Academic Year.

Hourly Equivalent of Academic/Calendar Year:

Full-time Calendar Year 1,950 hours
Full-time Academic Year 1,462 hours

Graduate Student Salaries and Assistantships:

For guidelines on ranges for University-funded Graduate and Undergraduate Student Salaries, please refer to the State's Human Resource Services' website: For Guidelines on Research Foundation Salary Ranges for both students and staff, please refer to the Research Foundation's Human Resource Services website.