What are Indirect Costs?
Indirect costs, also known as overhead or Facilities and Administrative (F&A) costs, are the costs of UM facilities, services, and administration incurred for common objectives that cannot be identified easily with a particular sponsored project.
Some examples of the pooled costs used by the University in determining its indirect cost rates and which the recovered indirect costs help pay for include:
- Maintaining and operating a physical plant
- General administration
- Use of capital assets
- Staff services such as purchasing, payroll, grants and contracts, and accounting.
What Indirect Cost Rate should I use?
The appropriate rate to use is determined by several factors:
- Project Type, please see Definitions of Project Types for F&A purposes.
- Sponsor Type: Federal, Foundation, Industry, etc., please see the Fact Sheet
- Location of Sponsored Activity: On Campus/Off Campus, please see Policy
- Sponsor's published written rate (as contained in the program announcement, request for proposal, proposal preparation guide, or published on their website)
- Implementing Stepped F&A Rates in Kuali (PDF Quick Guide)
- Tool to Calculate Split F&A Rates for a Project Period (Excel)
Are there any exceptions?
Indirect costs must be included in your proposal budget unless there is an exception as noted below:
- The sponsor has a written published policy of not paying indirect costs that is documented either within the guidelines, program announcement, RFP, etc. or is published on their website
- The Vice Chancellor for Research and Engagement has approved a reduction or waiver. There is a timeline and process for requesting reductions or waivers. Please see the Indirect Cost Waiver/Reduction Request Form.