Salary Cap

A salary cap sets an upper limit on the direct salary amount that a given individual budgeted on a grant or agreement may receive. Although salary caps are not exclusive to NIH, the NIH cap is probably the one most commonly seen at Northwestern.  Keep in mind that this does not mean that the NIH cap applies to every Federal agency or department; the Department of Defense, for example, does not use the NIH cap.

NIH Salary Cap

The current FY2024 Executive Level II salary amount is $221,900 as per the most recent NIH notice regarding Guidance on Salary Limitation for Grants and Cooperative Agreements FY 2024 (NOT-OD-24-057). General guidance is that for active awards restricted to Executive Level II, including competing awards already issued in the current fiscal year, if adequate funds are available, and if the salary cap increase is consistent with the institutional base salary, grantees may rebudget funds to accommodate the current Executive Level II salary level. However, no additional funds will be provided to these grant awards.

The U.S. Office of Personnel Management (OPM) issues the Pay Tables for Executive and Senior Level Employees as well as other wage scales.

Institutional Base Salary

The National Institutes of Health defines institutional base salary as follows:

“For the purposes of the salary limitation, the terms “direct salary,” “salary,” and “institutional base salary” have the same meaning and are exclusive of fringe benefits and facilities and administrative (F&A) expenses, also referred to as indirect costs. An individual’s institutional base salary is the annual compensation that the applicant organization pays for an individual’s appointment, whether that individual’s time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.”