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 annual appropriation act that provides authority for NIH to incur obligations for a given Fiscal Year (FY). At this time, NIH has not received an FY 2022 appropriation and is operating under a Continuing Resolution, the "Continuing Appropriations Act, 2022" (Public Law 117-70), that applies the terms and conditions of the Consolidated Appropriations Act, 2021.
The Consolidated Appropriations Act, 2021, restricts the amount of direct salary to Executive Level II of the Federal Executive pay scale. The Office of Personnel Management released new salary levels for the Executive Pay Scale and effective January 2, 2022, the salary limitation for Executive Level II is $203,700.
For active awards, including awards that have been issued in FY 2022 (continuation and new), that were restricted to the previous Executive Level II, 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.
Once the Department of Health and Human Services Appropriation for FY 2022 is enacted, NIH will publish the annual Notice of legislative mandates to provide information on any statutory provisions that limit the use of NIH grant funds in FY 2022.
The following are examples of Salary Application Requests, Salary Cap Calculations and Adjustments:
For all examples:
- the Institutional Full-Time base salary (FTS) is $225,000
- 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 2, 2022, is $203,700
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 | $ 225,000.00 | (FTS) |
b. | Direct Salary with research effort (50%) | $ 112,500.00 | (a x .50) |
c. | Fringe Benefits requested at 25% of salary | $ 28,125.00 | (b x .25) |
d. | SUBTOTAL | $ 140,625.00 | (b + c) |
e. | Requested F&A (indirect) costs at 45% of subtotal | $ 63,281.25 | (d x .45) |
f. | Total amount to be requested | $ 203,906.25 | (d + e) |
The salary cap for the above individual will be calculated as follows:
g. | Salary Cap - FY 2021 | $ 203,700.00 | |
h. | Salary Cap with research effort (50%) | $ 101,850.00 | (g x .50) |
i. | Fringe Benefits calculated at 25% of allowable salary | $ 25,462.50 | (h x .25) |
j. | SUBTOTAL | $ 127,312.50 | (h + i) |
k. | Associated F&A (indirect) costs at 45% of subtotal | $ 57,290.63 | (j x .45) |
l. | Total amount to be awarded due to salary limitation | $ 184,603.13 | (j + k) |
Therefore, the amount of reduction due to federal salary limitation is:
m. | Total adjustment | $ (19,303.13) | (l-f) |
For all examples:
- the Institutional Full-Time base salary (FTS) is $225,000
- 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 2, 2022, is $203,700
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 | $ 112,500.00 | (FTS x (6/12)) |
b. | Direct Salary with research effort (30%) | $ 33,750.00 | (a x .30) |
c. | Fringe Benefit Requested at 25% of salary | $ 8,437.50 | (b x .25) |
d. | SUBTOTAL | $ 42,187.50 | (b + c) |
e. | Requested F&A (indirect) costs at 45% of subtotal | $ 18,984.38 | (d x .45) |
f. | Total amount requested | $ 61,171.88 | (d + e) |
The salary cap for the above individual will be calculated as follows:
g. | Salary Cap - FY 2021 | $ 203,700.00 | |
h. | Salary Cap - FY 2021 (6-month rate) | $ 101,850.00 | (g x (6/12)) |
i. | Salary Cap with Research effort (30%) | $ 30,555.00 | (h x .30) |
j. | Fringe Benefits calculated at 25% of allowable salary | $ 7,638.75 | (i x .25) |
k. | SUBTOTAL | $ 38,193.75 | (i + j) |
l. | Associated F&A (indirect) costs at 45% of subtotal | $ 17,187.19 | (k x .45) |
m. | Total amount to be awarded due to salary limitation | $ 55,380.94 | (k + l) |
Therefore, the amount of reduction due to federal salary limitation is:
n. | Total Adjustment | $ (5,790.94) | (m-f) |
For all examples:
- the Institutional Full-Time base salary (FTS) is $225,000
- 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 2, 2022, is $203,700
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 | $ 168,750.00 | (FTS x (9/12)) |
b. | Direct salary requested | $ 50,625.00 | (a x .30) |
c. | Fringe Benefit Requested at 25% of salary | $ 12,656.25 | (b x .25) |
d. | SUBTOTAL | $ 63,281.25 | (b + c) |
e. | Requested F&A (indirect) costs at 45% of subtotal | $ 28,476.56 | (d x .45) |
f. | Total amount requested | $ 91,757.81 | (d + e) |
The salary cap for the above individual will be calculated as follows:
g. | Salary Cap - FY 2021 | $ 203,700.00 | |
h. | Salary Cap - FY 2021 (9-month rate) | $ 152,775.00 | (g x (9/12)) |
i. | Salary Cap with Research effort (30%) | $ 45,832.50 | (h x .30) |
j. | Fringe Benefits calculated at 25% of allowable salary | $ 11,458.13 | (i x .25) |
k. | SUBTOTAL | $ 57,290.63 | (i + j) |
l. | Associated F&A (indirect) costs at 45% of subtotal | $ 25,780.78 | (k x .45) |
m. | Total amount to be awarded due to salary limitation | $ 83,071.41 | (k + l) |
Therefore, the amount of reduction due to federal salary limitation is:
n. | Total Adjustment | $ (8,686.41) | (m-f) |
