Guidance on Salary Cap for DHHS & NIH Sponsored Programs

The Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 (Public Law 115-245), signed into law on September 28, 2018, restricts the amount of direct salary to Executive Level II of the Federal Executive pay scale.

Effective January 6, 2019, the current salary cap is $192,300, see NOT-OD-19-099. This rate is based on a 12 month appointment. This translates to $16,025/month or $144,225 for a faculty with a 9-month appointment.

The following items have been developed to provide guidance in complying with the DHHS salary cap requirements and to aid departments in calculating the appropriate salary that can be charged directly to DHHS sponsored programs and the salary “over the cap” that needs to be captured in the cost share account and funded from an unrestricted source.

The worksheet should be completed for any individual with an Institutional Base Salary (IBS) over the DHHS Salary Cap.

Specific tabs have been created and can be used:

    • At “Proposal Stage” when preparing a DHHS proposal budget.
    • At “Award Stage” when preparing a budget for the awarded year and to direct Payroll distribution.
    • At “Effort Reporting Stage” during the bi-annual effort report certification to verify the required “over the cap” salary and to certify total effort on all DHHS/NIH awards.


* The DHHS agencies to which the salary cap applies include not only NIH but also CDC, ACF, CMS, FDA, HRSA, AHRQ and SAMHSA.