Salary Cap Salary Cap Defined Salary cap is the difference between what is charged and the cap which is allowed by NIH Example FY PI Salary 250000 NIH Cap 2011 199700 100 Effort ID: 137116
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Slide1
National Institutes of Health
Salary CapSlide2
Salary Cap Defined
Salary cap is the difference between what is charged and the cap which is allowed by NIH
Example (FY):
PI Salary: $250,000 NIH Cap (2011): $199,700
100%
Effort
Monthly Sal: $20,833 Monthly Cap: $16,642
**Difference: $4,191 (Amt to be Cost Shared)
10%
Effort
Monthly Sal: $2,083 Monthly Cap: $1,664
**Difference: $419 (Amt to be Cost Shared)Slide3
2011 Salary Limitations
Grants, Cooperative Agreements, and ContractsSlide4
NOT – OD – 11 – 073
Things to remember:
Direct Salary, Salary, and Institutional Base Salary hold the same meeting in relation to the NIH salary limitations
Institutional Salary is the individual’s annual compensation that the organization pays for their appointment
Salary cap, as listed by NIH, is noted as FY Salary, not AYSlide5
NOT – OD – 11 – 073 Cont’d
FY 2011 Salary Cap
Fiscal Year Employee: $199,700
Academic Year Employee: $149,775
Or $16,642 monthly salarySlide6
2012 Salary Limitations
Grants, Cooperative Agreements, and ContractsSlide7
NOT – OD – 12-035
FY12 Salary Cap – Executive Level II ($179,700 FY; $134,775 AY; Monthly Salary $14,975)
Effective with awards issued on or after December 23, 2011.
FY 12 funds issued prior to this date will be calculated with the old rate of $199,700 (FY).
Carry over funds from previous years will remain at the salary limitation level in effect at the time those awards were issued. Slide8
How Purdue Manages FY12 Salary Cap
New Award
Sponsor Accounts and Salary Cap Cost Share Accounts will be established and utilize “FY12” within their title to indicate the appropriate level to be used
Increases (Non-Competing)
New Sponsor Accounts and New Salary Cap Cost Share Accounts will be established and named “FY12” Slide9
How Purdue Manages FY12 Salary Cap
Increases- Continued
Unobligated balances from previous years’ awards will remain in their original accounts
Salary charged to these funds will use the salary cap level in effect at the time the award was issued
Executive Level II (FY12) limitations will not be effective until the FY12 funds are used
EX: PI’s salary is $200,000
Level used when tracking Salary Cap on “old” funds would be $199,700
Level used when tracking Salary Cap on “new” funds would be $179,700Slide10
FY 13 Salary Cap Limitation
NIH is currently working under Continuing Resolution, therefore, all legislative mandates that were in effect in FY 12 remain in effect now.
This includes the Salary Limitation at Executive Level II ($179,700 FY)
FY13 funds issued while Continuing Resolution is in effect will be added to existing FY12 accounts within the grant and the SP title will be changed to include “FY13” Slide11
Things to Pay Attention to….Slide12
Changes
An increase in the Salary Cap limitation will affect the amount that will need to be cost shared
An increase or decrease in PI salary will affect the amount that will be cost shared or if Salary Cap is applicable
Changes in the PI’s effort on the project will change the cost distribution between sponsor dollars and cost share dollars
**Effort only changes the dollar amount of cost share required, not if Salary Cap is applicable
**If Salary Cap is increased, but the PI’s salary stays the same, Salary Cap could cease to apply; if the PI’s salary then falls under the new cap
Slide13
Examples of Calculating Salary Cap
Fiscal Year Employee and Academic Year EmployeeSlide14
Salary Cap Cheat Sheet
Year
Salary
Cap FY
Salary Cap AY
Monthly
Cap
2008
$191,300
$143,475
$15,942
2009
$196,700
$147,525
$16,392
2010
$199,700
$149,775
$16,642
2011
$199,700
$149,775
$16,642
FY12*
$179,700
$134,775
$14,975
*Effective with awards issued for FY12 on or after December 23, 2011 Slide15
Formulas for Calculating Salary Cap
Academic Year (monthly)
(Institutional Salary* 1/9) *
Effort
Fiscal Year (monthly)
(Institutional Salary * 1/12) *
Effort
Salary Cap: $16,642 *
Effort
$16,642 is based off the current NIH Salary Cap of $199,700
$199,700/12=$16,642
**Fringes are budgeted, but the PI’s salary drives the Cap, fringes just follow.Slide16
Academic Year Calculation
Institutional Salary: $200,000
($200,000*1/9) *
Effort
(100%)
=$22,222
($149,775*1/9) *
Effort
(100%)
=$16,642
Cost Share= $5,580
($200,000*1/9) *
Effort
(10%)
=$2,222
($149,775*1/9) *
Effort
(10%)
=$1,664
Cost Share= $558Slide17
Calculation & Distribution Examples
FY Employee Example
AY Employee Example
FY12 ExampleSlide18
Business Office Roles
Notify SPS personnel when an individual has exceeded the salary cap limitation and is paid on an NIH funded research project (41020000)
This applies to all personnel working on a project.
Provide SPS with budget (salary and fringes) for the Salary Cap Account
Accurately charge salaries to sponsor accounts and related cost sharing accounts based on PI’s effort certification
If effort changes at any point, the distribution should change to ensure proper allocation to the salary
cap
and sponsor accountsSlide19
Business Office Roles
Update your Salary Cap spreadsheet on a monthly basis to track and ensure compliance with the sponsor regulations
This is the ideal time to verify salary levels for the PI and make appropriate adjustments
Correct any non-compliance issues upon identificationSlide20
Post Award Roles
Distribute Agency guidelines to University Departments via Business @ Purdue
Review Salary Cap at PAR time
Contact business office personnel in the event of non-compliance
Meet with business offices upon request to discuss account specifics and/or overall management of salary cap faculty membersSlide21
Resources
Megan Sweet (Sr. Account
Mgr
)
765-494-6367
Natasha Lavrenz (Account
Mgr
)
765-494-1066
Please use generic e-mail (
spsdhhs@purdue.edu
)
NIH
http://grants.nih.gov/grants/policy/salcap_summary.htm
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-11-073.html
http://
grants.nih.gov/grants/guide/notice-files/NOT-OD-13-002.html
Sponsored Programs
http://www.purdue.edu/business/sps/postaward/sponsors/dhhs/index.html
Information housed under “Announcements”