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Salary Cap Example 3

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

Individual’s institutional base salary for a nine-month calendar year appointment $150,000
Research effort requested in application/proposal – 2.7 months (30% of 9 months)
Direct Salary requested $45,000
Fringe benefits requested (25% of salary) $11,250
Subtotal $56,250
Applicant organization’s F&A (indirect) costs at a rate of 45% of subtotal $25,313
Amount requested – salary plus fringe benefits plus associated F&A (indirect) costs $81,563
If a grant/contract is to be funded, the amount included in the award for the above individual will be calculated as follows:
Direct salary – restricted to a RATE of 75% of $181,500 $136,125
Divided by 9 months multiplied by 2.7months (30%) $40,838
Fringe benefits (25% of allowable salary) $10,209
Subtotal $51,047
Associated F&A (indirect) cost at 45% of subtotal $22,971
Total amount to be awarded due to salary limitation $74,018
Amount of reduction due to salary limitation
($81,563 requested minus $74,018 awarded)