Salary Cap Administration


Federal and nonfederal sponsors may limit the salary amounts paid on sponsored awards. The Federal salary cap is currently at the executive Level II of the Executive Pay scale.

NYU Approach

New York University (NYU) complies with sponsor-imposed limitation of salaries charged to sponsored programs. When there is a salary cap for a sponsored project, the Principal Investigator (PI) will monitor that any salary paid above the cap will not be charged to the sponsor.

Submitting Proposals

Grant proposals should be submitted with the PI's actual Institutional Base Salary, and adjusted for anticipated increases. When the grant is awarded, the agency adjusts the approved budget to reflect the salary cap.

Award Administration

The salary cap is used to compute the maximum allowed rate for an individual pay period. Therefore, the salary charged to the project under the salary cap will be the lesser of the following:

A) Maximum under the Cap =

(Salary Cap ÷ 12) x (percent of Effort) x (number of months devoted to project)

B) Salary based on Monthly IBS =

(IBS ÷ number of appointment months) x (percent of Effort) x (number of months devoted to project)

Note: Summer salary will be calculated the same as academic year salary.

  • When B is greater than A, the amount calculated under A should be charged to the grant. The difference between A and B (B-A) is considered an unallowable cost and must be charged to “a non-sponsored cost sharing chartfield.”
  • When A is greater than B, the amount calculated under B should be charged to the grant.

Roles and Responsibilities

Principal Investigator (PI):

  • If subsequent funding is awarded with a higher salary cap, the PI may need to re-budget available funds to adjust for the increase in salary. 
  • Certifies total effort on the projects(s), including both salary costs and charges to the non-sponsored cost sharing chartfield.

Department Administrators (DA's):

  • Accurately charge salaries to projects and related non-sponsored cost sharing chartfield;
  • Process Personnel Action Submission System (PASS/XPASS) forms to adjust salary over the cap;
  • Notify Sponsored Programs Administration (SPA) to establish a non-sponsored cost sharing chartfield;
  • Transfer the excess over the cap to a non-sponsored cost sharing chartfield.

Sponsored Programs Administration (SPA)

  • Verifies that the department has identified the excess over the salary cap as unallowable costs and such costs were transferred to a non-sponsored cost sharing chartfield.

Office of Sponsored Programs (OSP)

  • Monitors sponsor salary cap limitations and notifies departments of any changes.

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