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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
SponsorCap Applied
National Institutes of HealthDHHS Salary Cap
Administration for Children and FamiliesDHHS Salary Cap
Administration for Community LivingDHHS Salary Cap
Agency for Healthcare Research and QualityDHHS Salary Cap
Center for Disease ControlDHHS Salary Cap
Health Resources & Services AdministrationDHHS Salary Cap
Substance Abuse & Mental Health Services AdministrationDHHS Salary Cap
Food and Drug AdministrationDHHS Salary Cap
Non-Federal Sponsors
SponsorCap Applied
Anesthesia Safety FoundationDHHS Salary Cap
Cystic Fibrosis FoundationDHHS Salary Cap
Michael J. Fox FoundationDHHS Salary Cap
Edward P. Evans FoundationDHHS Salary Cap
Juvenile Diabetes Research FoundationDHHS 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) may impose their own 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 2024 Consolidated Appropriations Act restricts the amount of salary to the Executive Level II Salary rate cap for all US Department of Health and Human Services (DHHS) grants and contracts. The NIH issued NOT-OD-25-085 on 04/03/2025 announcing the new salary cap level, increasing from $221,900 to $225,700 for a 12-month appointment; the prorated level for 9-month faculty is $169,275.  Effective immediately, this new Executive Level II salary cap should be used for all new applications for any DHHS-funded program.

Effective April 1, 2025 the Executive Level II salary cap level is $225,700. 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 MonthsProrated DHHS Salary Cap
100%12$225,700
95%11.4$214,415
90%10.8$203,130
85%10.2$191,845
80%9.6$180,560
75%9$169,275
70%8.4$157,990
65%7.8$146,705
60%7.2$135,420
55%6.6$124,135
50%6$112,850
45%5.4$101,565
40%4.8$90,280
35%4.2$78,995
30%3.6$67,710
25%3$56,425
20%2.4$45,140
15%1.8$33,855
10%1.2$22,750
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 MonthsProrated DHHS Salary Cap
100%9$169,275
95%8.55$160,811
90%8.1$152,348
85%7.65$143,884
80%7.2$135,420
75%6.75$129,956
70%6.3$118,493
65%5.85$110,029
60%5.4$101,565
55%4.95$93,101
50%4.5$84,638
45%4.05$76,174
40%3.6$67,710
35%3.15$59,246
30%2.7$50,783
25%2.25$42,319
20%1.8$33,855
15%1.35$25,391
10%0.9$16,928

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 4.2.9 Salary Cap /Salary Limitation: “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 "Initialized" 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 $225,700 and click Save
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 April 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 2025 (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, funds may rebudgeted to accommodate the current Executive Level II salary cap.

Guidance for changes to cost share in SAP plans

To align SAP plans with SPS budgets, the payroll cost share plan amount related to the DHHS salary cap will no longer be reflected in SAP. The only cost share amounts entered in the SAP plan/budget column will be those that represent cost share committed to the sponsor, as included in the award agreement or SPS budget. As a reminder, Duke’s GAP 200.140 provides additional details on cost share processes and roles.