NIH Salary Cap, K Award and Clinical Activity

What is the NIH salary cap?

The NIH salary cap is the maximum amount of salary that can be charged to an NIH award. The salary cap does not limit total USC compensation but only the portion of compensation that is charged to the award. It assumes a 12-month, full-time contract so, if your appointment level or contract period is anything less, the amount must be prorated.

The difference between the percentage of total salary and the allowable salary must be charged to an unrestricted institutional account. Since this overage cannot be charged to an NIH grant, it cannot be used to meet any cost-sharing commitments.

As an example, if a faculty member is paid over the salary cap and is providing 10 percent of his or her effort on an NIH award, 10 percent of the capped amount for the corresponding time period can be charged.

Faculty Salary: $250,000
NIH Cap: $196,700
Effort on NIH grant: 10%

Maximum salary charge to NIH grant = effort % X NIH cap = 10% X $196,700 = $19,670
Difference = (effort % X faculty salary) – maximum salary charge to NIH grant = (10% X $250,000) – $19,670 = $25,000 – $19,670 = $5,330

Note that the percent of effort certified is 10 percent even though less than 10 percent of total salary is charged.

For the current NIH salary cap, visit the NIH webpage: http://grants.nih.gov/grants/policy/salcap_summary.htm

I have a K Award. How does this affect my effort?

NIH Career Development, or K Awards, are awards to support new faculty but can be given to senior faculty as well. K Awards come with established effort requirements, usually up to 75 percent. This effort requirement must be fulfilled. K Awards often come with a salary limit as well. If the required percentage of the faculty member’s salary is over the salary limit, the difference must be cost shared.

For example, a faculty member with a salary of $150,000 has a K Award with a 75 percent effort requirement and a $100,000 salary limit, would be set up as follows.

Faculty Salary: $150,000
K Award required effort: 75%
75% of salary: $112,500
Salary charged to K Award: $100,000
Difference must be cost shared: $ 12,500

In this example, 75 percent of the faculty member’s effort would be certified on the K Award even though less than 75 percent of his or her salary was charged.

I am a faculty member with patient care private practice activity. How does my clinical incentive compensation factor in my effort reporting?

Variable clinical incentive compensation is not considered part of institutional base salary because it is not set in advance, among other reasons. Accordingly, it is not included in a faculty member’s institutional base salary for grant proposals and is not certified. This applies to both periodic (usually quarterly) and annual clinical incentive compensation and bonus.

Core clinical compensation (fixed clinical salary) is included as part of a faculty member’s institutional base salary for proposal and certification purposes. Faculty certify to this effort via eCert under “Other Institutional Effort.”

I am a faculty member with industry-sponsored clinical trials managed by HRA. How does this affect my effort certification?

Research activity on clinical trials managed by a Health Research Association (HRA) is considered part of USC’s institutional effort and is part of USC institutional base salary. This effort should be charged to an HRA account or, with dean’s approval, to an unrestricted institutional account. Industry-sponsored clinical trial effort does not need to be certified separately for purposes of effort certification included in USC’s institutional base salary. During the HRA budgeting process, faculty members will be asked to provide their estimated effort in order to develop an accurate budget for the sponsor. Faculty certify to this effort via eCert under “Other Institutional Effort.”

As with all research activity, faculty members should charge the HRA trial or an appropriate cost share account in accordance with the effort worked.

Outside consulting activity is not included in USC’s institutional base salary or USC’s institutional effort. Consulting income should only be for activities outside of the university. Compensation for the time and effort of conducting the trial is not considered outside consulting.