The salary cap for Harvard University, specifically for grant awards and contracts issued on or after January 1, 2024, is $221,900. This figure represents the maximum amount of an individual's institutional base salary that can be charged to a federal grant or contract, particularly those governed by federal guidelines such as the HHS (Health and Human Services) salary cap.
Understanding the Salary Cap and Related Financial Parameters
While the salary cap dictates the maximum allowable salary cost for certain grants, Harvard University has its own institutional base salary (IBS) guidelines and associated costs for sponsored projects. It's crucial to distinguish between the institutional base salary, which is the employee's actual annual salary, and the salary cap, which limits how much of that salary can be charged to specific external funds.
Here's a breakdown of key financial parameters related to salaries and sponsored projects at Harvard:
| Financial Parameter | Details |
|---|---|
| Salary Cap | $221,900 (for grant awards/contracts issued on or after January 1, 2024). This is the maximum amount that can be charged to applicable sponsored projects for an individual's salary. |
| Institutional Full-Time Base Salary (IBS) | $240,000. This refers to the full-time base salary paid by Harvard University to its employees, independent of specific grant limitations. |
| Fringe Benefits Rate | 25% of the direct salary. This rate covers additional employee benefits such as health insurance, retirement contributions, and other mandated benefits, calculated as a percentage of the direct salary charged to a project. |
| F&A (Facilities & Administrative) Indirect Cost Rate | 45%. Also known as indirect costs or overhead, this rate covers expenses like utilities, building maintenance, administrative support, and other costs not directly tied to a specific project but necessary for its execution. |
Implications of the Salary Cap
The existence of a salary cap means that if an individual's Institutional Base Salary (IBS) exceeds the cap, the difference (also known as "unrecovered salary" or "salary over the cap") must be covered by other unrestricted institutional funds rather than the specific grant or contract. This ensures compliance with federal funding regulations.
For example:
- If an individual's IBS is $240,000, and the salary cap is $221,900, the grant can only be charged for $221,900 of the salary.
- The remaining $18,100 ($240,000 - $221,900) must be paid from non-sponsored, institutional funds.
Understanding these distinctions is vital for budgeting and managing sponsored projects effectively at institutions like Harvard. For more details on these guidelines, particularly concerning the HHS salary cap, refer to relevant institutional news and updates on grant administration.
