Friday, April 28, 2023

Compensation Caps for 2023

The Office of Federal Procurement Policy (OFPP) recently published the compensation cap for 2023. The new cap is $619,000 and represents a 5.1 percent increase over the 2022 compensation cap. This is the largest annual increase since these caps were established by the Bipartisan Budget Act of 2013). 

Following are the compensation caps by year:

Prior to 2014, compensation caps were applied variously to 'top five employees in management positions', and 'all employees' depending on the year and whether the contract was awarded by DoD/NASA or a civilian agency. Also, compensation caps prior to 2014 were much higher, peaking at $1.1 million in 2014. If you still have contracts awarded prior to June 24, 2014, you should become very familiar with FAR 31.205-6(p) to ensure accurate implementation of compensation caps.