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Applying the Federal Salary Cap

The Federal Salary Cap is tied to the federal Executive Level II salary level. The most recent salary cap information is posted at http://grants2.nih.gov/grants/policy/salcap_summary.htm. Remember that the Federal Salary Cap applies to all agencies and federal flow through agencies except the Food & Drug Administration and the Indian Health Services. The Institutional Base Salary is to be used to calculate salary; the agency will adjust the awarded salary subject to the current salary cap at the time of award.

The University of Oklahoma Health Sciences Center (OUHSC) defines the Institutional Base Salary (IBS) as the salary that is guaranteed annually by the employee’s department, approved by the Board of Regents of the University of Oklahoma, and documented in the OUHSC Annual Budget Book. For purpose of receiving compensation on grants or contracts, the IBS is derived solely from the OUHSC portion of the employee’s total compensation. IBS does not include Professional Practice Plan compensation or other clinical compensation that is not guaranteed and approved by the University Regents.

OUHSC employees with VA appointments will be compensated for time and effort on OUHSC grants and contracts in accordance with the NIH Grants Policy Statement regarding compensation of Federal employees for all grants and contracts received at OUHSC, regardless of funding source.

Federal salary cannot be included in the OUHSC IBS on grants and contracts. Only the OUHSC portion of salary may be used to determine the amount of allowable compensation on grants and contracts. The allowable salary is based on the percentage of the OUHSC appointment that is applicable to the effort devoted to the project. If the OUHSC employee does not receive salary from OUHSC, then salary cannot be requested or charged to a grant or contract.

For proposals submitted to DHHS agencies, when the IBS exceeds the salary cap, calculate the appropriate percent of salary to charge to the grant. This can be done using the salary cap calculator.

http://www.ouhsc.edu/financialservices/documents/Grants_Contracts_forms/NIH_Salary_Calculator.xlsx

The amount of salary over the salary cap must be charged to a non-sponsored chartfield. This must be done by completing an EPAF in the Human Capital system.

Example: Professor with an institutional base of $200,000 is committing 25% effort on a grant from NIH that was awarded on 1/5/2012. The applicable salary cap is $179,700.

IBS salary: 200,000 x .25 = 50,000
Salary paid by grant: 179,700 x .25 = 44,925
Amount to be cost shared: $5,075