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Salary Cap Example 1

Individual with Full-Time Appointment (based on grant award/contract issued on or after January 12, 2014 with salary limitation of $181,500)

Individual’s institutional base salary for a FULL-TIME calendar year appointment $200,000
Research effort requested in application/proposal – 6 months (50%)
Direct Salary requested $100,000
Fringe benefits requested (25% of salary) $25,000
Subtotal $125,000
Applicant organization’s F&A (indirect) costs at a rate of 45% of subtotal $56,250
Amount requested – salary plus fringe benefits plus associated F&A (indirect) costs $181,250
If a grant/contract is to be funded, the amount included for the above individual will be calculated as follows:
Direct salary – restricted to a RATE of $181,250
Divided by 12 months multiplied by 6 months (50%) $90,750
Fringe benefits (25% of allowable salary) $22,688
Subtotal $113,438
Associated F&A (indirect) costs at 45% of subtotal $51,047
Total amount to be awarded due to salary limitation $164,485
Amount of reduction due to salary limitation
($181,250 requested minus $164,485 awarded)