Besides being a CAP of $125,900, it is also a hourly rate.  As far as the
NIH is concerned there are 2080 work hours in a year (2080 divided by 52).
125,900 divided by 2080 equals $60.52 an hour.  You cannot propose more
hours than 2080 will be worked in a year.

In the old DHHS agreement the rate was published, i.e., $125,000 divided by
2080 equals 60.096 an hour.  I have been unable to find the new hourly rate
published anywhere, so if anyone could help me with this it would be much
appreciated.

To calculate the maximum amount someone could receive for Research
Quarter/Summer Quarter (3/9th's).  $60.52 times 520 hours (the maximum
amount of hours allowed for Research Quater) equals $31,470.

This has always been my understanding of how to calculate the maximum
amount of Research Quarter allowable on NIH grants.

>Subject: NIH salary caps
>
>I am looking for advice on  how other administrators have dealth with a
>problem that our unit has recently had to deal with:  the NIH "cap" on
>salaries for faculty investigators with 9-month appointments.  My apologies
>for the wordiness of what follows:
>
>The NIH has long imposed a salary cap (now at $125,900) on the RATE at
>which researchers may be paid for work on NIH-funded projects.  For people
>on 12-month appointments, this is fairly straightforward:  divide 125,900
>by 12 and one arrives at a monthly rate of $10,492.  (This is the example
>provided in the NIH Guide.)  But what of people (faculty, generally) on
>9-month appointments?
>
>At research universities, this is a fairly common appointment:  one's
>institutional base annual salary is paid in return for working 9 months of
>academic year time.  At many universities, one is allowed to work
>"overtime" during the summer for a maximum of 3 months and receive 1/9 of
>one's annual salary per month.  For junior faculty, this is relatively
>straightforward.  But for senior faculty, it is likely that their salaries
>may exceed the capped RATE.  How to compute their salaries?  The problem
>arises both for academic year salaries and for summer salaries.  For
instance:
>
>Your PI has a salary of $150,000 on a 9-month appointment.  Were he funded
>by some combination of, say, university funds and funds from a private
>foundation, his monthly salary would be $16,666 (150,000/9), and he could
>receive up to $200,000 total annual compensation (9x16,666 +  3x16,666).
>
>Suppose, however, that the PI wants to use NIH research funds to pay for
>one summer month?  One's immediate reaction is to say:  well, the 125,900
>cap applies, so divide $125,900 by 9, and the summer month is reimbursed at
>$13,989.  A bit of a cut from what he would have received for work done on
>non-NIH funding, but a nice salary nonetheless.
>
>But, someone says, Aha!  One does not divide an annual salary by 9 (even
>though the university considers that the institutional base annual salary),
>one divides an annual salary by 12!  Thus the maximum monthly compensation
>permitted is $10,492--same as for people on 12-month appointments.  Hmmm.
>Now the PI's salary for one-month of summer work is taking a hit vis-a-vis
>what it would have been under the first two scenarios.  Is this a problem?
>
>Well, yes.  Imagine you are a PI on a nine-month appointment.  At what
>point does your 9-month appointment's annual salary exceed the NIH salary
>cap?  Answer:  at $94,425.  If you make more than that, you take a pay cut
>to work on NIH-funded projects.  Can it get worse?
>
>Try this:  your hypothetical PI has an institutional annual base salary of
>$150,000 per year on a 9-month appointment.  She gets two grants from NIH
>agencies:  1) she is PI one that funds her one summer month; 2) the other
>provides for 50% buy-out time so that she can do research during the
>academic year.  NIH says that grant #2 is limited to paying $62,950 (one
>half of the $125,900 cap) for 4.5 months during the academic year and that
>the PI can use no other NIH funds to pay summer salary.  So your PI could
>not take ANY salary for work on any NIH project over the summer.  That is a
>serious salary "hit."
>
>It is possible, of course, to "top up" PI salaries from other, non-Federal
>sources, but this truly begs the question.  If this interpretation of
>9-month salary structures is indeed immutable, this is not a good incentive
>for senior PIs to do work on topics of interest to NIH.
>
>Do all NIH agencies interpret the salary cap issue in this manner?  Is
>there some obvious solution to the problems outlined above?  Do others see
>this as an issue that needs to be addressed?
>
>With thanks for your advice,
>
>Bob Barde, Academic Coordinator
>Institute of Business and Economic Research
>F502 Haas  UC Berkeley 94720-1922
>tel. (510) 642-8351  fax 642-5018
>xxxxxx@uclink4.berkeley.edu
>
>

Deborah Everds
Cell & Molecular Biology
Northwestern University Medical School
303 East Chicago Avenue
Chicago, IL  60611

Phone:  312-503-4334

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