Treatment of Specific Types of Costs
Guideline Date: April 2015 Revision: 1 Last Review: August 2017
Direct Costs (specifically identified with a sponsored project with a high degree of accuracy)
Direct costs may include the following:
- Compensation of employees for their effort on the project
- Materials consumed or expended in the performance of the work, e.g., lab supplies
- Consulting costs
Indirect Costs (incurred for a common or joint purpose that cannot be readily and specifically identified with a particular sponsored project or activity)
Indirect costs may include the following:
- Custodial costs for building maintenance
- Department administration
- Department computers
- Sponsored projects administration
Whether a cost is allowable as a direct or indirect cost is often questioned. The following sections provide brief explanations and examples of exceptional circumstances that might allow an item to be charged as a direct cost to a project or projects.
Note that in most circumstances, there is an associated burden of documentation or justification placed upon the principal investigator (PI).
- If the cost is anticipated, include it in the budget and budget justification at the proposal stage.