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Indirect Costs Practice

 

Indirect Costs in Targeted Sponsored Research

As a policy, Western applies 40 per cent indirect costs on all direct costs of sponsored research. Direct costs include salaries, equipment, materials and reagents, and travel. Overhead, or indirect costs, are actual costs the university incurs to support research at Western, including maintaining laboratories, facilities and equipment, staff and administration.

The reality is that universities do not recover the real costs of research. The Fundamental Science Review estimates actual indirect costs of funded projects range from 40-60 per cent. A recent assessment by the University of Toronto puts the figure at 57 per cent.

Even with support from the Government of Canada’s Research Support Fund – which covers indirect costs at a rate of approximately 22 per cent of the value of Tri-Agency grants – there remains a significant shortfall for the various indirect costs of research. These include, among others, facility and equipment maintenance, administration, knowledge resources and regulatory needs necessary to sustain our research enterprise.

Broadly, sponsored research comes in the form of targeted funding opportunities that are not broadly offered in an open, public call (as e.g., funding offered by an industry partner to a specific PI for a specific project, including for matching programs).

Exceptions to this policy include funding from community groups, small not-for-profit organizations and for-profit micro-businesses. These will be reviewed on a case-by-case basis and can be directed to Lisa Cechetto, Executive Director, Western Research.

Indirect Costs in Open Research Calls

For sponsored research funding and open calls, research project budgets must include eligible expenses as established by a Funding Agency/Sponsor and their specific funding opportunity guideline. Where indirect costs and/or overhead costs are an eligible expense, Western University requires project budgets include both direct costs and indirect costs. The overhead rate to be used in the project budget will be determined by the maximum rate allowed by a Funding Agency/Sponsor. If a maximum rate is not stipulated in writing by a Funding Agency/Sponsor, Western Research will confirm with the Agency/Sponsor the applicable rate to be included in the project budget.

Indirect Costs Calculator

To aid you in finding your project's expected indirect costs, Western Research has created this simple online tool, below.

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