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 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 Member
With over 40 years of experience as a government funding award accounting specialist, Ed is a recognized national expert in the field. In addition to helping hundreds of clients navigate FAR Part 31 compliance. he has been an active speaker and panel moderator at Tech Connect's National SRIR/STTR conferences since 2011. presents at the DOD's Mentor Protégé Summit and presents regularly for several state and local organizations.