Direct and Indirect Costs

Two types of costs are associated with sponsored projects: direct costs and indirect costs.

Direct and indirect costs are distinguished by whether the cost can be identified with a particular sponsored project, not the nature of the cost.

Direct Costs

Direct costs can be identified with a particular sponsored project or can be assigned directly to such activities relatively easily with a high degree of accuracy.


  • Salary of a researcher (including benefits)
  • Salary of a technical staff member (including benefits)
  • Laboratory supplies, chemicals, and glassware purchased for a project
  • Travel to a conference to present results of the project

Indirect Costs

Indirect costs (also called Facilities and Administrative (F&A) costs or overhead costs) are incurred for common or joint objectives. Therefore, they cannot be identified readily with a particular sponsored project.

Examples include:

  • Building utility or maintenance costs
  • Salary of a departmental administrator
  • Library costs

Applying Costs to Sponsored Projects

Generally, the total cost of a sponsored project is the sum of the allowable direct costs plus the allocable portion of the allowable indirect costs.

Updated March 25, 2024