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Salary Cap Administration

Background

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.

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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.

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Roles and Responsibilities

Principal Investigator (PI):

  • Manage project funds in compliance with sponsor requirements;
  • Submit competing and non-competing proposals budgets that comply with salary limitation imposed by the sponsor;
  • If a project is awarded with a funding limitation and subsequent funding is awarded such that a higher level of salary charges becomes possible, a determination should be made as to whether or not to re-budget available funds;
  • When certifying effort, make sure that the certification data correctly reflects total effort to the project(s). This means that both direct charges and cost sharing are correctly represented.  

Department Administrators (DA's):

  • Work with PIs to ensure that the salaries are appropriate for competing and non-competing proposals being submitted to agencies reflecting salary caps as applicable;
  • Accurately charge salaries to projects and related cost sharing accounts reflecting no more than the percentage Full-Time Equivalent (FTE) identified by the Principal Investigator on the project multiplied by the applicable salary cap;
  • Ensure compliance with the 95% direct charging of academic year and summer salary as referenced in the Effort Reporting Policy;
  • Process appropriate PeopleSync (Workday) actions to adjust salary over a cap and ensure that the excess over the cap is transferred to a cost share program;
  • Notify Sponsored Programs Administration (SPA) to ensure they establish a cost share program chartfield in FAME.

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. Spa also make sure to include the capped amount in the applicable Modified Total Direct Cost Base for Facilities and Administrative (F&A) rate calculation purposes.

Office of Sponsored Programs (OSP)

  • Monitors sponsor salary cap limitations and notifies departments of any changes. During the proposal review and approval process, ensure amounts budgeted for salary complies with sponsor limitations. 

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