Managing Salaries Over the Cap

A salary cap is a sponsor-imposed provision that limits the salary (excluding fringe and F&A costs) that can be direct-charged for individuals working on the sponsored project. Although the sponsor may cap the salary direct-charged to the project, it does not limit the salary that a faculty may receive for the work on the project – Duke is responsible for the difference (salary over the cap).

Important Reminders:

When entering the budget in SPS, SPS will automatically calculate the prorated salary for anyone over the salary cap.

Reporting is available in the Grants Management tab of Duke@Work to see detailed results at the faculty, project and effort month level.

While the DHHS salary cap is the most common at Duke, it is not the only salary cap. Other sponsors may impose a similar salary cap. Below are example lists (not exhaustive) of sponsor salary caps, as of May 2022.

Federal Sponsors

Sponsor	Cap Applied
National Institutes of Health	DHHS Salary Cap
Administration for Children and Families	DHHS Salary Cap
Administration for Community Living	DHHS Salary Cap
Agency for Healthcare Research and Quality	DHHS Salary Cap
Center for Disease Control	DHHS Salary Cap
Health Resources & Services Administration	DHHS Salary Cap
Substance Abuse & Mental Health Services Administration	DHHS Salary Cap
Food and Drug Administration	DHHS Salary Cap

Non-Federal Sponsors

Sponsor	Cap Applied
Anesthesia Safety Foundation	DHHS Salary Cap
Cystic Fibrosis Foundation	DHHS Salary Cap
Michael J. Fox Foundation	DHHS Salary Cap
Edward P. Evans Foundation	DHHS Salary Cap
Juvenile Diabetes Research Foundation	DHHS Salary Cap
Multiple Sclerosis Society	$199,700
Patient Centered Outcomes Research Institute	$200,000
Susan G. Komen Foundation	$250,000

Prorating the Salary Cap

Current actual Institutional Base Salary (IBS) must be used as the basis for preparing budgets and calculating salaries in all applications for external funding (including NIH modular grants). If the current actual IBS is above the prorated salary cap in effect at the time, the IBS may be entered as ZERO. In this case, the budget justification MUST include a statement disclosing the fact that the IBS is over the cap. See Proposal, JIT, and RPPR Disclosure Statements.

Prorating for non-DHHS Sponsors

Some sponsors (other than NIH) also impose limitations on the amount of salary that can be direct charged to a sponsored project. Check the sponsor's policies and application guidelines to confirm whether the sponsor has any salary limitations, restrictions, or caps.

Prorating for DHHS agencies

The 2023 Federal appropriations act (Public Law 117-328) confirmed the continuation of the Executive Level II Salary rate cap for all Department of Health and Human Services (DHHS) grants and contracts. The NIH issued NOT-OD-23-056 on 1/12/2023 announcing the new salary cap level, increasing from $203,700 to $212,100 for a 12-month appointment; the prorated level for 9-month faculty is $159,075. Effective immediately, this new Executive Level II salary cap should be used for all new applications for any DHHS-funded program.

Effective January 12, 2023, the Executive Level II salary cap level is $212,100. The full salary cap is applicable only to 100% 12 month faculty appointments. All others must be prorated, see charts below:

12-Month Appointment Type

Unless the faculty member has a 100% 12-month Duke University appointment, the salary cap must be prorated using the faculty’s appointment type (12 month) and appointment percentage.

Duke Appointment %	# of Available Calendar Months	Prorated DHHS Salary Cap
100%	12	$212,100
95%	11.4	$201,495
90%	10.8	$190,890
85%	10.2	$180,285
80%	9.6	$169,680
75%	9	$159,075
70%	8.4	$148,470
65%	7.8	$137,865
60%	7.2	$127,260
55%	6.6	$116,655
50%	6	$106,050
45%	5.4	$95,445
40%	4.8	$84,840
35%	4.2	$74,235
30%	3.6	$63,630
25%	3	$53,025
20%	2.4	$42420
15%	1.8	$31,815
10%	1.2	$21,210

9-Month Appointment Type

The salary cap must be prorated for all 9 month faculty using the faculty’s appointment type (9 month) and appointment percentage.

Duke Appointment %	# of Available Calendar Months	Prorated DHHS Salary Cap
100%	9	$159,075
95%	8.55	$151,121
90%	8.1	$143,168
85%	7.65	$135,214
80%	7.2	$127,260
75%	6.75	$119,306
70%	6.3	$111,353
65%	5.85	$103,399
60%	5.4	$95,445
55%	4.95	$87,491
50%	4.5	$79,538
45%	4.05	$71,584
40%	3.6	$63,630
35%	3.15	$55,676
30%	2.7	$47,723
25%	2.25	$39,769
20%	1.8	$31,815
15%	1.35	$23,861
10%	0.9	$15,908

Guidance for DHHS salary cap updates

Use the following information as guidance for complying with DHHS salary cap updates:

Guidance for submitted proposals

For applications that displayed the institutional base salary (instead of the salary cap), the sponsor should calculate the allowable salary and award it at the rate in effect at the time of award. From the NIH Grants Policy Statement: “Applications and proposals with categorical direct cost budgets reflecting direct salaries of individuals in excess of the rate prescribed in the Act will be adjusted in accordance with the legislative salary limitation.”

Guidance for proposals in "Initiated" state in SPS

Proposals in an "Initialized" state in SPS need to be updated with the new salary cap amount using the following steps:

Go to the Salary Cap tab in the Budget > Setup notebook
Update the Salary Cap Amount to $212,100 and click Save
Click OK on the pop-up message
Go to the Salary tab of the Budget > View/Edit notebook and select the Update Calculated Amts button at the bottom of the page
Calculated amounts should now be updated and shown in yellow
Click Save
Go to the Summary Budget page tab of the Budget > View/Edit notebook and select Calculate F&A Costs. Click “Save”

Guidance for active awards

No action is needed to implement the higher salary cap for active awards; as of February 1, the payroll cost share tool will automatically use the new level for current and future salary on all affected grants and subawards, while DHHS-funded contracts/subcontracts will continue using the salary cap in effect at time of initial contract issuance, per DHHS regulations.

For active awards, including awards that have been issued in FY 2023 (continuation and new), that were restricted to the previous Executive Level II, if adequate funds are available in active awards, and if the salary cap increase is consistent with the institutional base salary, recipients may rebudget funds to accommodate the current Executive Level II salary level.