The NIH salary cap is not a single FY2026 figure — it changed mid-year. For awards issued October 1, 2025 through December 31, 2025, the cap is $225,700. For awards issued January 1, 2026 through September 30, 2026, the cap is $228,000. This is not a limit on what an institution may pay an investigator — it is the maximum annual salary rate that NIH grants, cooperative agreements, and contracts will reimburse. Last verified: August 16, 2026, directly against NIH’s own Salary Cap Summary page (grants.nih.gov/policy-and-compliance/policy-topics/nih-fiscal-policies/salary-cap-summary), not a secondary summary.
What the NIH salary cap is
The NIH salary cap — formally the salary rate limitation — restricts the portion of an individual’s institutional base salary (IBS) that NIH extramural awards may reimburse. It applies to grants, cooperative agreements, and R&D contracts funded by NIH, and to the same salary-rate limitation as applied by other HHS operating divisions, including CDC, AHRQ, and SAMHSA. Congress sets the cap each fiscal year through appropriations language, which ties the dollar figure to Executive Level II of the Federal Executive Pay Schedule — a rate the Office of Personnel Management (OPM), not NIH, determines annually. NIH republishes the resulting figure each fiscal year, and applies it based on the date an award is issued, not the calendar year alone.
See NIH Salary Cap in the CASRAI Dictionary for the concise operational definition and FAQ; this guide expands on the mechanics, the full historical record, and a worked calculation.
Scope change since FY2025: the cap now covers direct AND indirect salaries
This is a material compliance point that is easy to miss if you’re working from an older summary. Per NIH’s own Salary Cap Summary page: “For FY 1990 through FY 2024, the salary cap applied only to direct salaries. Effective for FY 2025 (NOT-OD-25-025), the salary cap applies to both: Direct salaries (individuals working directly on NIH projects). Indirect salaries (executive salaries in various uncapped cost pools).”
In practice, this means the salary-cap limitation is no longer confined to the direct-charged effort of individuals named on an NIH award. Since FY2025, institutions must also apply the same Executive Level II ceiling when charging executive and administrative salaries to the indirect (F&A) cost pools that ultimately get recovered through federally negotiated indirect cost rates. A sponsored-programs office that only re-checks PI and key-personnel direct salary against the cap — the pre-FY2025 practice — is not fully compliant as of FY2025 and FY2026; indirect-pool salary review needs to be part of the same annual reconciliation. See NIH Guide Notice NOT-OD-25-025 for the full policy text.
The FY2026 figure and how it was corrected
FY2026 has two effective rates, because NIH’s fiscal year (October 1 – September 30) does not align with the calendar-year OPM pay adjustment that resets each January 1:
- Awards issued October 1, 2025 through December 31, 2025 (Executive Level II): $225,700 — a carryover of the rate that applied for the second half of FY2025.
- Awards issued January 1, 2026 through September 30, 2026 (Executive Level II): $228,000.
NIH announced the $228,000 FY2026 rate in Guide Notice NOT-OD-26-034, issued January 28, 2026. That original notice stated an effective date of January 11, 2026. NIH subsequently issued a correction, NOT-OD-26-038 (February 9, 2026), fixing the effective date at January 1, 2026 instead — all other guidance in NOT-OD-26-034 was left unchanged. Institutions should apply $228,000 to salary charged on or after January 1, 2026, including retroactive rebudgeting on distributions already drawn for that period, and to all new and competing renewal proposals. For any award actually issued in the October–December 2025 window, $225,700, not $228,000, is the applicable cap — using the higher figure for that quarter would overstate what NIH will actually reimburse.
For a 9-month academic-year appointment, institutions typically prorate the applicable-quarter cap to an academic-year equivalent — approximately $171,000 using the $228,000 rate — rather than applying the full 12-month figure. Because the cap is revised annually (and, as of FY2026, mid-year) and is a function of federal pay-scale policy rather than a fixed number, always confirm the current rate and its effective date directly against NIH’s Salary Cap Summary page before using it in a budget, rather than assuming a single figure covers the whole fiscal year.
NIH salary cap history, FY2017–FY2026
Every NIH fiscal year runs October 1 through September 30, but the Executive Level II rate typically resets on January 1, splitting most fiscal years into two effective-rate periods: an October–December carryover of the prior calendar year’s rate, and a January–September period at the new rate. The table below reflects both periods for each fiscal year, matching the structure NIH itself uses on its Salary Cap Summary page, so a specific pay period can be matched to the correct rate rather than assuming one figure applies for the full fiscal year.
| Fiscal year | Award-issued period | Executive Level II / NIH salary cap |
|---|---|---|
| FY2017 | Oct 1, 2016 – Jan 7, 2017 | $185,100 |
| FY2017 | Jan 8, 2017 – Sep 30, 2017 | $187,000 |
| FY2018 | Oct 1, 2017 – Jan 6, 2018 | $187,000 |
| FY2018 | Jan 7, 2018 – Sep 30, 2018 | $189,600 |
| FY2019 | Oct 1, 2018 – Jan 5, 2019 | $189,600 |
| FY2019 | Jan 6, 2019 – Sep 30, 2019 | $192,300 |
| FY2020 | Oct 1, 2019 – Jan 4, 2020 | $192,300 |
| FY2020 | Jan 5, 2020 – Sep 30, 2020 | $197,300 |
| FY2021 | Oct 1, 2020 – Jan 2, 2021 | $197,300 |
| FY2021 | Jan 3, 2021 – Sep 30, 2021 | $199,300 |
| FY2022 | Oct 1, 2021 – Jan 1, 2022 | $199,300 |
| FY2022 | Jan 2, 2022 – Sep 30, 2022 | $203,700 |
| FY2023 | Oct 1, 2022 – Dec 31, 2022 | $203,700 |
| FY2023 | Jan 1, 2023 – Sep 30, 2023 | $212,100 |
| FY2024 | Oct 1, 2023 – Dec 31, 2023 | $212,100 |
| FY2024 | Jan 1, 2024 – Sep 30, 2024 | $221,900 |
| FY2025 | Oct 1, 2024 – Dec 31, 2024 | $221,900 |
| FY2025 | Jan 1, 2025 – Sep 30, 2025 | $225,700 |
| FY2026 | Oct 1, 2025 – Dec 31, 2025 | $225,700 |
| FY2026 | Jan 1, 2026 – Sep 30, 2026 | $228,000 |
This table is compiled directly from NIH’s own Salary Cap Summary (FY 1990–Present) page, which is the authoritative, continuously updated record and also carries figures back to FY1990. Because every fiscal year in this range includes a mid-year rate change, always match the specific pay period — not just the fiscal year label — to the correct rate.
What the cap limits — and what it doesn’t
The cap does not restrict what an institution pays an investigator. Institutional base salary is set entirely by institutional compensation policy, independent of any federal rule. What the cap restricts is federal reimbursement: for whatever percentage of effort is charged directly to an NIH-funded award, only the portion of salary up to the applicable capped rate is an allowable charge against that award. Since FY2025, the same ceiling also applies to executive salaries charged to indirect (F&A) cost pools — see the scope-change section above. Salary above the cap, in either the direct or indirect context, is simply not chargeable to NIH funds for the period in question.
Institutions generally handle the resulting gap on the direct-salary side one of two ways:
- Cost-share the excess. The amount above the cap is charged to a non-federal, institutional funding source rather than the grant, while the effort percentage recorded on the certification still reflects the actual effort performed.
- Reduce the percentage of effort formally charged to the award to a level that fits within the cap, while ensuring the institution’s own policy still accounts for the salary difference through some non-federal mechanism — effort actually performed still has to be truthfully certified either way — the cap changes what NIH pays for, not what happened. See CASRAI’s guide to effort reporting and payroll certification for how that certification requirement actually works.
Cost-sharing driven by the salary cap is a real institutional commitment with downstream implications: it can factor into future base calculations and creates audit exposure if not documented consistently across every award an over-the-cap investigator holds. See Faculty Effort Allocation Across Multiple Grants for how effort commitments are reconciled when someone holds several awards simultaneously, some of which are cap-affected and some not.
How to prorate the cap for a percentage of effort
The cap is a full-time-equivalent annual rate; NIH does not reimburse more than the applicable capped rate for the period in question, regardless of the investigator’s actual institutional base salary, and the allowable charge to the award scales with the effort percentage actually charged. The general formula:
Maximum allowable NIH salary charge = (lesser of IBS or the applicable salary cap) × percent effort charged to the award
The “lesser of” matters: if IBS is below the cap, the cap is irrelevant and the calculation is simply IBS × effort percentage, same as any uncapped award. The cap only changes the arithmetic once IBS exceeds it — and, for a fiscal year like FY2026 that has two effective rates, the applicable cap depends on when the award was issued, not just the fiscal year.
Worked example
An investigator has an institutional base salary of $260,000 (12-month appointment) and commits 40% effort to an NIH R01 award issued on or after January 1, 2026, so the applicable FY2026 cap is $228,000 (the rate in effect for that quarter; an award issued between October and December 2025 would instead use $225,700):
- Uncapped calculation (what 40% of actual salary would be): $260,000 × 0.40 = $104,000.
- Capped calculation (what NIH will actually reimburse): $228,000 × 0.40 = $91,200.
- The gap: $104,000 − $91,200 = $12,800. This amount cannot be charged to the R01. The institution must either cost-share it from a non-federal source, or reduce the effort percentage formally charged to the award to a level where $228,000 × (reduced %) no longer exceeds what the institution is willing or able to charge — while the investigator’s actual committed effort, and what the institution pays them for it, are unaffected by which mechanism is chosen.
Note that the $12,800 gap is specific to this combination of IBS, effort percentage, and the applicable-period cap — it recalculates every time any one of those three inputs changes, including simply because the cap moves at the start of a new rate period while IBS and effort stay the same. This example illustrates the direct-salary/effort application of the cap only; since FY2025 the same Executive Level II ceiling separately applies to executive salaries charged to indirect cost pools, which institutions reconcile through their F&A rate proposal process rather than through an individual effort calculation like this one.
Multi-year awards already underway
Because the cap changes at least annually (and mid-year, as of FY2026) and most NIH awards span multiple years, a given award can cross from being unaffected by the cap into being affected by it — or the reverse — purely because the cap moved, even with no change in the investigator’s salary or committed effort. Sponsored-programs offices generally re-run the cap calculation for every capped-salary investigator at each rate change within a fiscal year (not only at the fiscal-year boundary, given FY2026’s mid-year change) and any time an investigator’s institutional base salary changes. Where the new cap allows it, awards are rebudgeted going forward from the notice’s effective date; NIH’s guidance on a given year’s notice typically permits retroactive application to distributions already drawn since that effective date, which is one reason getting the effective date right (not just the dollar figure) matters — the FY2026 correction between NOT-OD-26-034 and NOT-OD-26-038 changed the effective date by ten days, which is exactly the kind of detail that affects a retroactive rebudgeting calculation. Discovering an over-the-cap charge on an already-drawn-down award after the fact is treated as a compliance finding, not a routine adjustment, so proactive re-verification at each rate change is the standard practice, not an optional extra.
Why the cap is tied to Executive Level II
The salary limitation is not an NIH policy choice made independently each year — it is set by Congress in NIH’s annual appropriations act, which caps NIH-reimbursable salary at the rate for Executive Level II of the Federal Executive Pay Schedule. Because OPM adjusts that federal pay scale on its own schedule (typically effective in January, alongside the annual federal pay adjustment), the NIH salary cap moves in step with that schedule mid-fiscal-year. NIH does not set the underlying number — it publishes an NIH Guide Notice each year translating OPM’s Executive Level II figure into extramural grants guidance, which is why the cap’s effective date sometimes lags or is later corrected relative to the calendar year, as happened with the FY2026 notice.
Frequently asked questions
What is the NIH salary cap for 2026?
It depends on when the award was issued. For awards issued October 1, 2025 through December 31, 2025, the cap is $225,700. For awards issued January 1, 2026 through September 30, 2026, the cap is $228,000, per NIH Guide Notice NOT-OD-26-034 as corrected by NOT-OD-26-038. There is no single figure that applies to the entire fiscal year.
Does the salary cap only limit direct salary charged to a grant?
No, not since FY2025. For FY 1990 through FY 2024, the cap applied only to direct salaries of individuals working on NIH-funded projects. Effective FY2025, per NIH Guide Notice NOT-OD-25-025, the cap also applies to indirect salaries — executive salaries charged to the uncapped cost pools that flow into an institution’s negotiated indirect cost rate. Both FY2025 and FY2026 are subject to this broader scope.
Does the salary cap mean an investigator can’t be paid more than the capped rate?
No. Institutions may pay whatever institutional base salary their own compensation policy sets. The cap only limits how much of that salary NIH will reimburse for the effort percentage charged to an NIH-funded award (and, since FY2025, for executive salary charged to indirect cost pools).
What happens to the salary above the cap?
It cannot be charged to the NIH award. Institutions typically either cost-share the difference from non-federal funds or reduce the percentage of effort formally charged to the award — the investigator’s actual compensation and committed effort are unaffected by which mechanism is used.
Does the cap apply to existing, multi-year awards, or only new proposals?
Both. NIH applies the new cap to new and competing renewal proposals, and institutions are also expected to rebudget existing, ongoing awards going forward from the notice’s effective date — often with retroactive application permitted back to that date within the fiscal year the notice covers.
What is the academic-year (9-month) equivalent of the FY2026 cap?
Approximately $171,000, prorated from the $228,000 rate that applies to awards issued January 1, 2026 through September 30, 2026.
Does the salary cap only apply to NIH awards?
No. The same Executive Level II salary rate limitation applies to other HHS-funded extramural awards, including those from CDC, AHRQ, and SAMHSA.
Has the NIH salary cap ever decreased?
It has not decreased in recent history — the year-over-year figures since 2017 have all increased or held flat within a fiscal year, but a decrease would require Executive Level II itself to fall, which has not occurred in this period.
