Topic summary
Indirect cost
Extracted from the Wikipedia article Indirect costs.
Indirect vs direct costs
Often, such as when applying for funding under a grant, indirect costs are specified as a fixed percentage, this percentage having been negotiated in advance. This is the case, for example, in federally-funded research in the United States. In this case, the indirect costs percentage is specified relative to direct costs, not to the total request. A grant requesting $100k in direct costs with an indirect cost rate of 50%, for example, means that the request will include an additional request for $50k for indirect costs for a total request of $150k, as opposed to a request for $100k of indirect costs for a total request of $200k.