1

NIH Salary Cap

NIH imposes a limitation on the rate of pay individuals may receive as compensation from NIH fundsFor calendar year 2004, the cap is $175,700 per yearNIH also mandates that the portion of the individual’s salary that represents the difference between the capped rate and the actual rate may not be received from federal sourcesThe rate can and usually does change on an annual basis

2

NIH Salary Cap

For example:PI with a salary of $200,000 per year25% paid by an NSF grant; 25% by an NIH grant; 50% by CIT funds The PI may only be paid $43,920 from NIH

funds (he will be paid $50,000 from NSF funds)

The difference of $6,080, which exceeds the NIH cap, can be paid from non-federal sources

3

NIH Salary Cap

At Caltech an excel spreadsheet is available to assist division/center personnel in calculating the appropriate percent of time needed to input into the payroll system in order to maintain consistency with the NIH salary capThis document also serves the purpose of providing an audit trail

http://atc.caltech.edu/Finance/policies.htm

4

NIH Salary Cap

Procedure:Prior to initiation of any payroll transaction from NIH funds, the division determines which employees are above the salary cap

Divisions utilize the NIH salary cap template to determine the percentage of salary that can be charged to relevant NIH grants, and what portion should be charged to non-federal funds

Divisions should retain completed NIH salary cap template as part of the record of that payroll transaction

5

NIH Salary Cap

Procedure:On annual basis, and at the end of each NIH award’s competitive cycle, Project Accounting will run a report on that award to verify that all salary payments were consistent with the NIH salary cap in effect at the time of the payment, and work with the Division/Center to make necessary adjustments