NIH Salary Cap

1. NIH Salary Cap • NIH imposes a limitation on the rate of pay individuals may receive as compensation from NIH funds • For calendar year 2004, the cap is $175,700 per year • NIH 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 sources • The rate can and usually does change on an annual basis

2. NIH Salary Cap For example: • PI with a salary of $200,000 per year • 25% 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 cap • This 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 partof 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