NIH and NSF impose compensation level restrictions for the direct salary support of principal investigators and other senior personnel.
NIH Salary Cap
Since 1990 Congress has legislatively mandated a provision that limits the direct salary an individual may receive from an NIH grant. The mandate appeared in the annual appropriations act that provides authority for NIH to incur obligations for a given fiscal year. In the absence of this appropriation, NIH operates under a continuing resolution.
The current Executive Level II Salary for FY2023 is $212,100.
For the purposes of discussing salary limitation, the terms "direct salary," "salary," and "institutional base salary" have the same meaning and are exclusive of fringe benefits and facilities and administrative (F&A) expenses, also referred to as indirect costs. An individual's institutional base salary is the annual compensation that the applicant organization pays for an individual's appointment, whether that individual's time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.
NSF Salary/Effort Policy
The National Science Foundation has no salary cap; however, NSF's Proposal and Award Policies and Procedures Guide limits faculty to two months' salary per year from all NSF sources, unless specifically budgeted and approved by NSF.
For example, if a PI has three active NSF awards, NSF will not provide support beyond two months' cumulative salary (not two months from each of the three). Any deviation from this practice must be disclosed in the proposal budget, justified in the budget justificaiton, and specifically approved by NSF in the award notice.