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NIH Increases 2021 Salary Cap

February 17, 2021 / Ed Jameson / Blog Posts
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NIH Increase Salary Cap

The National Institute for Health (NIH) recently announced an increase in the salary cap from $197,300 to $199,300. The increase, effective January 3, 2021, applies to all NIH grants, cooperative agreement awards, and extramural research and development contract awards issued after the effective date.

Below is a summary of recent NIH Salary Caps:

GFY 2021 Awards Issued 
October 1, 2020 through January 2, 2021

January 3, 2021 through September 30, 2021




GFY 2020 Awards Issued 

October 1, 2019 through January 4, 2020

January 5, 2020 through September 30, 2020




GFY 2019 Awards Issued 

October 1, 2018 through January 5, 2019

January 6, 2019 through September 30, 2019




It is important to note that the salary cap is exclusive of fringe benefits and facilities and administrative (F&A) expenses.


Effect on Consultants and Subcontractors

An individual’s actual salary is not constrained by this cap, but simply limits the amount that may be awarded and charged to NIH grants and contracts. A company may still pay an individual’s salary amount in excess of the salary cap, but must use other funding sources.

In addition, the cap does not apply to payments made to consultants under an NIH grant – though consultant payments must meet the tests of reasonableness. The salary limitation provision does apply to sub-awards/subcontracts for work under an NIH grant or contract.


NIH will not adjust grant awards already issued in FY 2021. However, re-budgeting is allowed provided funds are available and the increase is warranted.

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Ed Jameson, CPA, Managing Partner

I’ve been in practice for over 40 years helping our small business clients procure, manage, and survive audits on more than $6 billion in federal government contract and grant funding. We’ve been featured presenters and panel moderators at Tech Connect’s National SBIR/STTR conferences since 2010, and I’ve presented at the DOD’s Mentor Protégé Summit and present regularly for several state and local organizations.