NIH Salary Cap

Limitations on NIH grant salaries

The National Institutes of Health sets a limitation on salary that may be charged to an NIH award on an annual basis, requiring salary charged over the stated limitation to be recorded as unallowable.

The salary limitation also applies to cost share referenced in the proposal or award budget. Salary over the stated limitation applied to cost share must similarly be recorded as unallowable.

The calculation of the salary limitation and required unallowable portion of salary for an individual varies based on the person's appointment (institutional base salary) and the project on which the person is working. The NIH typically announces new salary limitation figures in January of each year.

Shortly after NIH releases the annual limitation, Indiana University will disseminate the new NIH salary limitation information, usually by March 1 of the current salary limitation year.

Read IU's policy on National Institutes of Health Salary Limitation

Determining salary limitation amount

To establish the individual salary limitation amount for a specific award, the following information must be determined:

  1. the individual’s appointment (10-Pay, 12-Pay, Summer)
  2. the percentage effort to be applied (or that has been applied) to the award

Once the individual’s appointment has been determined, the current effective salary limitation is applied.

Departments with individuals receiving compensation from the Indiana University Health Partners practice plan and who have effort on any sponsored research account adhering to NIH salary limitation guidelines must ensure that all individuals meet the NIH salary limitation guidelines. An illustration of the NIH salary limitation as applied to individuals with practice plan effort is provided below.

Examples: