Applying a Salary Cap

• The salary cap is the maximum annual rate of UMB salary for full-time effort that can be charged to a sponsor.
• For employees funded by HHS agencies (including NIH), the current Executive Level II cap applies.
  • 2025 cap: $225,700 (effective Jan 1, 2025)
• The cap applies to:
  • Grants, cooperative agreements, and contracts from covered agencies
  • Both detailed and modular budgets

Detailed Budgets

• Use the Institutional Base Salary (IBS) to calculate charges to the grant.
• The agency will adjust the awarded salary to the cap if necessary.
• Apply annual inflation as usual.

Kuali Research Notes:

• No special instructions; enter salaries normally.

NIH Modular Budgets

• Modules should reflect a reasonable estimate of allowable, allocable, and appropriate costs.
• Use the current salary cap to estimate personnel costs and number of modules requested.

Kuali Research Notes:

• For personnel whose salary exceeds the cap:
  1. Go to Project Personnel in the budget module.
  2. Click Details next to the person’s name.
  3. Enter the salary cap in the Base Salary field.

Other Budget Scenarios

• For detailed budgets with restricted funds:
  • Prefer using IBS to calculate all personnel costs.
  • If not possible, use the current salary cap for Year 1.
  • Apply annual inflation to subsequent years.
  • Include a note in the Budget Justification:
    • State that the salary cap was used
    • State the inflation rate applied, if applicable

Step-by-Step Formula:

1. Multiply the Salary Cap by the effort percentage committed to the grant.
2. Divide the result by the Institutional Base Salary (IBS).
3. Enter the result as Charged % in Kuali Research.
4. Enter the effort commitment as Effort %.

Note: Kuali Research will automatically apply a 3% annual inflation. Do not check “Submit Cost Sharing” in Budget Settings.

Example:

• Salary Cap = $225,700
• Institutional Base Salary = $275,000
• Effort = 25%

Step 1: $225,700 × 0.25 = $56,425
Step 2: $56,425 ÷ $275,000 = 0.2052 → Enter Charged % = 20.52%
Step 3: Enter Effort % = 25%

• All salary charges must comply with the federal salary cap and sponsor terms.
• The Institutional Base Salary is required for calculation and audit purposes.
• Ensure budget justification clearly documents any use of the cap.
• For NIH modular budgets, the estimated salary should remain reasonable and allocable to the proposed work.