| Indirect Cost Calculations
Indirect costs include various types of services and support that are not directly related to the performance of the project, and that often are difficult to measure and assign specifically. They are often thought of as “overhead." Typically, these might include costs associated with facilities maintenance, central administration, sponsored projects administration, payroll, human resources, accounting, and library operations.
These expenses are recovered by the institution through indirect costs charged to the funding agency. An indirect cost rate is negotiated between the Department of Health and Human Services and the institution, and remains in effect for seven years. At Fort Lewis College the indirect cost rate (35%) is applied to what is termed salaries and benefits, if they are allowed at all by the funding agency. These may only include salaries, wages and benefits, or some other combination of categories. For this reason, it is advisable to critically consider whether salaries, wages and benefits should be used as cost sharing amounts if the funding agency only allows for recovery of indirect costs on these budget categories.
The PI should consult with the Office of Grants Management to determine the applicable negotiated rate, if any, for the agency to which the proposal is being submitted. The appropriate rate is then applied to allowable budget categories, and the amount is included on the budget page(s).
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