Guidance on Salary Limitation for Grants and Cooperative Agreements FY 2023
Notice Number:
NOT-OD-23-056

Key Dates

Release Date:

January 12, 2023

Related Announcements

NOT-OD-23-052 - NIH Operates Under a Continuing Resolution

NOT-OD-23-050 - NIH Operates Under a Continuing Resolution

NOT-OD-23-005 - NIH Operates Under a Continuing Resolution

Issued by

NATIONAL INSTITUTES OF HEALTH (NIH)

Purpose

This Notice provides information regarding the salary limitation for NIH grant and cooperative agreement awards and extramural research and development contract awards.

Since 1990, Congress has legislatively mandated a limitation on direct salary for individuals under NIH grant and cooperative agreement awards (referred to here as a grant). The mandate appears in the Consolidated Appropriations Act, 2023 (Public Law 117-328), signed into law on December 29, 2022, which provides authority for NIH to incur obligations for Fiscal Year 2023.

The Consolidated Appropriations Act, 2023 restricts the amount of direct salary to Executive Level II of the Federal Executive pay scale. The Office of Personnel Management recently released new salary levels for the Executive Pay Scale. Effective January 1, 2023, the salary limitation for Executive Level II is $212,100.

For issued awards that were restricted to Executive Level II (see historical record of salary cap link below), including competing awards already issued in FY 2023, if adequate funds are available in active awards, and if the salary cap increase is consistent with the institutional base salary, recipients may rebudget funds to accommodate the current Executive Level II salary level.

For a historical record of the salary cap, including effective dates, see: https://grants.nih.gov/grants/policy/salcap_summary.htm

The following are examples of Salary Application Requests, Salary Cap Calculations and Adjustments:

For all examples:

  • the Institutional Full-Time base salary (FTS) is $240,000
  • the requested Fringe Benefits rate is 25% of the direct salary
  • the (F&A) indirect cost rate is 45%
  • the salary cap for grant awards/contracts issued on or after January 1, 2023, is $212,100

Example 1. Individual with Full-Time Appointment

Research effort requested in application/proposal – 12 months (50% effort)

a.

Individual's institutional base salary for a FULL-TIME calendar year appointment

$ 240,000.00

(FTS)

b.

Direct Salary with research effort (50%)

$ 120,000.00

(a x .50)

c.

Fringe Benefits requested at 25% of salary

$ 30,000.00

(b x .25)

d.

SUBTOTAL

$ 150,000.00

(b + c)

e.

Requested F&A (indirect) costs at 45% of subtotal

$ 67,500.00

(d x .45)

f.

Total amount to be requested

$ 217,500.00

(d + e)


The salary cap for the above individual will be calculated as follows:

g.

Salary Cap – FY 2023

$ 212,100.00

 

h.

Salary Cap with research effort (50%)

$ 106,050.00

(g x .50)

i.

Fringe Benefits calculated at 25% of allowable salary

$ 26,512.50

(h x .25)

j.

SUBTOTAL

$ 132,562.50

(h + i)

k.

Associated F&A (indirect) costs at 45% of subtotal

$ 59,653.13

(j x .45)

l.

Total amount to be awarded due to salary limitation

$ 192,215.63

(j + k)


Therefore, the amount of reduction due to federal salary limitation is:

m.

Total adjustment

$ (25,284.37)

(l - f)


For all examples:

  • the Institutional Full-Time base salary (FTS) is $240,000
  • the requested Fringe Benefits rate is 25% of the direct salary
  • the (F&A) indirect cost rate is 45%.
  • the salary cap for grant awards/contracts issued on or after January 1, 2023, is $212,100

Example 2. Individual with Half-Time Appointment

Research effort requested in application/proposal – 6 months (30% effort)

a.

Individual's institutional base salary for a HALF-TIME calendar year appointment

$ 120,000.00

(FTS x (6/12))

b.

Direct Salary with research effort (30%)

$ 36,000.00

(a x .30)

c.

Fringe Benefit Requested at 25% of salary

$ 9,000.00

(b x .25)

d.

SUBTOTAL

$ 45,000.00

(b + c)

e.

Requested F&A (indirect) costs at 45% of subtotal

$ 20,250.00

(d x .45)

f.

Total amount requested

$ 65,250.00

(d + e)


The salary cap for the above individual will be calculated as follows:

g.

Salary Cap – FY 2023

$ 212,100.00

 

h.

Salary Cap – FY 2023 (6-month rate)

$ 106,050.00

(g x (6/12))

i.

Salary Cap with Research effort (30%)

$ 31,815.00

(h x .30)

j.

Fringe Benefits calculated at 25% of allowable salary

$ 7,953.75

(i x .25)

k.

SUBTOTAL

$ 39,768.75

(i + j)

l.

Associated F&A (indirect) costs at 45% of subtotal

$ 17,895.94

(k x .45)

m.

Total amount to be awarded due to salary limitation

$ 57,664.69

(k + l)


Therefore, the amount of reduction due to federal salary limitation is:

n.

Total Adjustment

$ (7,585.31)

(m-f)


For all examples:

  • the Institutional Full-Time base salary (FTS) is $240,000
  • the requested Fringe Benefits rate is 25% of the direct salary
  • the (F&A) indirect cost rate is 45%.
  • the salary cap for grant awards/contracts issued on or after January 1, 2023, is $212,100

Example 3. Individual with a Nine-Month Appointment

Research effort requested in application/proposal – 9 months (30% effort)

a.

Individual's institutional base salary for a nine-month calendar year appointment

$ 180,000.00

(FTS x (9/12))

b.

Direct salary requested

$ 54,000.00

(a x .30)

c.

Fringe Benefit Requested at 25% of salary

$ 13,500.00

(b x .25)

d.

SUBTOTAL

$ 67,500.00

(b + c)

e.

Requested F&A (indirect) costs at 45% of subtotal

$ 30,375.00

(d x .45)

f.

Total amount requested

$ 97,875.00

(d + e)


The salary cap for the above individual will be calculated as follows:

g.

Salary Cap – FY 2023

$ 212,100.00

 

h.

Salary Cap – FY 2023 (9-month rate)

$ 159,075.00

(g x (9/12))

i.

Salary Cap with Research effort (30%)

$ 47,722.50

(h x .30)

j.

Fringe Benefits calculated at 25% of allowable salary

$ 11,930.63

(i x .25)

k.

SUBTOTAL

$ 59,653.13

(i + j)

l.

Associated F&A (indirect) costs at 45% of subtotal

$ 26,843.91

(k x .45)

m.

Total amount to be awarded due to salary limitation

$ 86,497.04

(k + l)


Therefore, the amount of reduction due to federal salary limitation is:

n.

Total Adjustment

$ (11,377.96)

(m-f)


 

Inquiries

Questions about specific awards may be directed to the Grants Management Specialist identified on the Notice of Award.

Questions related to the NIH salary cap policy may be directed to the Division of Grants Policy at: grantspolicy@nih.gov.