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Limitations on grant salaries
An awarding agency may require a limitation on the amount of salary individuals may charge to issued awards requiring salary charged over the stated limitation to be recorded as unallowable.
The National Institutes of Health sets a limitation on salary that may be charged to an NIH award on an annual basis. Other agencies with limitations on salaries will reference the requirement in the award agreement.
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:
- The individual's appointment (10-Pay, 12-Pay, Summer)
- The salary limitation
- The NIH Salary Limitation information (Accessible 1/20/23) is listed on the ORA website
- Other agencies with limitations on salaries will reference the requirement in the award agreement
- The current Institutional Base Salary (IBS) for the employee
- The percent of IBS effort (Direct Salary + Cost Share)
- The Allowable Percent = Salary Limitation / Institutional Base Salary
The total effort percentage charged to an award account (Direct Salary + Cost Share) is multiplied by the Allowable Percent to determine the allowable amount that can be to be applied to the award. The remainder is unallowable and must be applied to an INSxx subaccount. ORA provides a Salary Cap Calculator to assist in the determination of the allowable salary and required amount over the cap that must be applied to an "INSxx" subaccount.
Verifying salary cap
ORA also provides a Salary Cap Dashboard report to assist with reviewing salary charges already applied to award accounts subject to a salary cap
Salary Cap for Summer Salary
All summer salary is subject to the same salary limitation requirement. The allowable amount of summer salary that can be charged to a grant with a salary limitation requirement is based on the prior fiscal year Institutional Base Salary and the current effective Salary Limitation. A sample calculation of the summer salary limitation is provided at the link to the 10-Month Example below.
IUHP Salary Cap
Departments with individuals receiving compensation from the Indiana University Health Partners practice plan and who have effort on any sponsored research account adhering to salary limitation requirements must ensure that all individuals meet the corresponding agency's salary limitation requirements. An illustration of the salary limitation as applied to individuals with practice plan effort is provided below
Determining Salary Cap
- Salary Cap Determination for 10 Month Employees (Accessible 4/26/22)
- Salary Cap Determination for 12 Month Employees (Accessible 4/26/22)
- Salary Cap Determination for IU Employees Receiving Indiana University and Practice Plan Compensation (Accessible 4/26/22)
Verifying Salary Cap
- Verifying Salary Cap for 10 Month Employees (Accessible 4/15/22)
- Verifying Salary Cap for 12 Month Employees (Accessible 4/15/22)
- Verifying Salary Cap for IU Employee Receiving Indiana University and Practice Plan Compensation (Accessible 4/15/22)
Non-Federal Agencies with a Salary Cap Requirement
Below is a list of non-federal agencies that are known to have a salary cap requirement.
- Cystic Fibrosis Foundation
- Michael J. Fox Foundation
- Juvenile Diabetes Research Foundation
- Multiple Sclerosis Society
- Patient Centered Outcomes Research Institute
- Susan G. Komen Foundation
- Alex's Lemonade Stand
- Autism Speaks
- James S. McDonnell Foundation
- Ovarian Cancer Research Fund
- California Institute for Regenerative Medicine (CIRM)
Agencies with limitations on salaries will reference the requirement in the award agreement.
Please notify ORA at firstname.lastname@example.org if there are non-federal agencies that have a salary cap requirement and are not listed here.