What is the NIH salary cap?

Beginning in 1990, each year Congress has set a limit on the amount of salary that can be paid to an individual on an NIH grant. The current fiscal year's notice (2011) states that no individual can be budgeted at a salary of more than $199,700 per year, prorated according to effort.

The salary cap is designed to prevent people from being "overpaid" on federal grants, at a level higher than most federal executives. This helps to ensure fairness and equality among individuals being paid by the government.

If you are budgeting someone on your NIH grant proposal with a salary of more than $199,700 per year, you will need to determine where the difference in salary will come from. In many cases, university departments will make arrangements to cover the difference in investigator salary and support from NIH. If you can't find written policies on this at your institution, talk to your Sponsored Research Office. If the grant is awarded, nobody wants to be scrambling after the fact to find the money to cover a salary difference!

WARNING: some individuals seem to think they can get around the salary cap by budgeting someone for more effort than they intend to actually spend on the project, essentially "overbilling" NIH to make up the difference. In most university environments, checks are in place to make sure that this does not happen. Why? This type of model would be defrauding the federal government. Not a good idea! If you need to save money on your grant, and at least one of your investigators is paid at an amount over the salary cap, you have a couple of options. 1) Budget the person at a small amount, and lessen their responsibilities on the project. 2) Hire the expensive person as a consultant, and work with him or her do determine a reasonable amount of payment for the duties needed. (NOTE: if the person who is paid over the salary cap is employed by the same institution as the PI, you may be prevented from budgeting him/her as a consultant by institutional rules.)