The U.S. Office of Personnel Management (OPM) announced an increase in the Executive Level II salary cap from $221,900 to $225,700, effective January 1, 2025. This cap applies to federally funded awards; however, its adoption across agencies varies.
The National Institutes of Health (NIH) continues to operate under a Continuing Resolution (CR) per NOT-OD-25-010 (opens in new window) and has not issued formal guidance permitting the use of the new salary cap for NIH-funded awards. As a result, “all legislative mandates that were in effect in FY 2024, seen here NOT-OD-24-110 (opens in new window), remain in effect under this CR” and UCSF must continue using the previous cap of $221,900 until NIH guidance is updated.
Agencies that have Adopted the 2025 Salary Cap
Agency for Healthcare Research & Quality (AHRQ): On January 22, 2025, AHRQ released NOT-HS-25-015 (opens in new window) which announced the newly adopted salary cap effective January 1, 2025. The AHRQ salary cap increases to $225,700. This guidance regarding both the increase and rebudgeting applies only to AHRQ.
The Health Resources and Services Administration (HRSA): HRSA, an agency of Health and Human Services (HHS), has also announced an increase to the salary cap. Effective January 1, 2025, the cap is raised from $221,900 to $225,700. For more detailed information on the increase, review the HHS Salary Cap Summary Table (opens in new window).
Implementation Guidance
1. OSR Proposals Submissions: On January 7, 2025, the Office of Sponsored Research (OSR) started applying the 2025 salary cap to proposals for federal sponsors at the discretion of the Principal Investigator (PI). At the time of award, the appropriate salary cap should be selected based on the most current guidance.
2. NIH Applications: For NIH proposals, PIs should be aware of the following:
- If NIH implements the new salary cap, award totals will not be adjusted unless the new cap was specifically requested in the approved budget. However, recipients may re-budget if permitted by the award.
- If NIH does not implement the new cap at the time of award and the proposal budget applies the new cap, NIH will adjust the budget to align with the current cap.
3. eProposal Update: eProposal has been updated to include an option for the new $225,700 salary cap, allowing its application to new, renewal, revision, transfer-in, and resubmission proposals as needed.
4. For Active Awards:
- The FY2024 and FY2025 salary caps are both available for funding entry in UC Path. Select the correct salary cap as indicated specific to the award and sponsor you are entering.
- AHRQ and HRSA Awards: Charge the new salary cap of $225,700 and re-budget as per the official notice where the budget allows.
- Department of Health and Human Services (DHHS) Awards (Non-AHRQ Institutes, including NIH): Continue using the current salary cap of $221,900 until further guidance from the federal agency is issued.
5. Payroll Funding Update:
- The Salary Cap/MCOP Funding Worksheet includes both the previous and new NIH salary caps. Departments should create a new effective-dated funding record and apply the appropriate Cap Rate when adjusting payroll funding prospectively. While use of the Faculty Salary Calculator (FSC) worksheet (opens in new window) is not required for funding entry, it is updated to reflect both salary cap options.