Applying a Salary Cap

Two methods for salary calculation with a salary cap

Detailed budgets

The Institutional Base Salary is to be used to calculate salary; the sponsor will adjust the awarded salary, subject to the current salary cap at the time of the award. The annual inflation increase should be applied to the budget as usual. 

Kuali Research data entry: No special instructions.

NIH modular budgets:

For NIH modular budgets, since the modules should be a reasonable estimate of costs allowable, allocable, and appropriate for the proposed project, it is appropriate to use the current salary cap when developing the budget and estimating the number of modules to request.

Kuali Research data entry: For each investigator whose salary is over the cap, on the Project Personnel section of the budget module, click the Details button to the right of the person's name. Enter the salary cap in the Base Salary field.

Other scenarios with restricted budgets

In other scenarios with detailed budgets, it is preferable to use the Institutional Base Salary to calculate all personnel costs. However, if this is not possible given budget constraints, use the current salary cap for Year 1 of the budget. Apply annual inflation to the budget as usual. In the Budget Justification, state that the salary cap was used, and the rate of inflation applied, if applicable.

Kuali Research data entry - to show the IBS but calculate on the salary cap:

To calculate the appropriate percent of salary to charge to the grant:

1. Take the Salary Cap and multiply it by the effort percentage to be committed to the grant
2. Take that result and divide it by the Institutional Base Salary
3. Enter that result as Charged %
4. Enter the effort to be committed to the project as Effort %
5. Kuali Research will apply inflation at 3%. This is OK!
6. Ensure that “Submit Cost Sharing” is NOT checked in Budget Settings.

EXAMPLE:

Salary cap = $225,700
Institutional Base Salary = $275,000
Effort commitment = 25%

1. Take the Salary Cap and multiply it by the effort percent to be committed to the grant: $225,700 x 0.25 = 56,425
2. Take that result and divide it by the Institutional Base Salary: 56,425/275,000 = 0.2052 (.20518...)
3. Enter that result as Charged % (20.52%)
4. Enter the effort to be committed to the project as Effort % (25%)
5. Kuali Research will apply annual inflation at 3%. This is OK!
6. Ensure that “Submit Cost Sharing” is NOT checked in Budget Settings.