A salary cap is defined as a maximum amount or rate of compensation for personal services that a sponsor will reimburse the University on a sponsored program. A Salary Cap is NOT a limitation on how much a Principal Investigator can be paid by the University. Calculations for salary do not include fringe benefits. They are calculated separately, based on the salary cap, and should be identified in the proposed budget as a separate line item. At CUNY, the amount of salary above the cap is designated as cost sharing.

The Department of Health and Human Services (DHHS)

DHHS, which includes the NIH (National Institutes of Health), has a salary cap that limits the amount of funding the agency will provide for an individual’s salary. The salary cap amount is reviewed annually and is indexed to a specified Executive Pay Level and changes periodically.

Department of Defense (DOD)

The DOD cap, “Benchmark Compensation Amount”, is applicable to contracts only, is currently set at a total compensation rate of $952,308 (all forms of remuneration for services, and related costs that would be considered fringe benefits) per federal fiscal year.

National Science Foundation (NSF)

There is no salary cap for proposals submitted to NSF.   However, NSF’s Proposal and Award Policies and Procedures Guide limits faculty to two months of their salary in any one year. This limit includes salary compensation received from all NSF-funded grants. Faculty paid from multiple NSF grants must not re-budget to pay themselves additional salary. The total amount of salary paid from all NSF grant sources must not exceed two months unless explicitly approved by NSF.

Other Sponsors

Other sponsors may also impose a salary cap so it is important to review the solicitation to determine if your sponsor has a salary cap.