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Budgets - Indirect Costs

Find links and information on indirect costs in budget preparation.

Indirect costs—sometimes referred to as Overhead or IDC or Facilities and Administrative Costs (F& A Costs)—are those costs not specifically identifiable for any one project or program, but which are valid expenses of conducting research, instruction, and other sponsored activities at UCSD. For example: building use, equipment depreciation, operation and maintenance of UCSD facilities, student services, departmental administration, or administrative support offices. The most current formal Indirect Cost Rate Agreement is dated May 12, 2010. 

Budget Preparation Rates Quick Reference (PDF) - includes fringe benefit rates, tuition remission rates and indirect cost rates.

For a copy of the UC San Diego indirect cost rate agreement, see Institutional Information and Codes.

For background information and guidance regarding University of California Indirect Cost Recovery practices, please refer to the UC Indirect Cost Recovery page or the Contract and Grant Manual - Chapter 8: Indirect Cost

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Indirect Costs 101

Learn all about Indirect Costs & how they work with this 28 minute video by NIH Deputy Director Sally Rockey

Link to YouTube video

Federally Negotiated IDC Rates

All proposal budgets that are submitted to funding agencies must provide for the recovery of indirect costs using the appropriate negotiated rate. For budgets that are being submitted to the Federal Government or For Profit agencies, there are five categories of federally negotiated Indirect Costs rates for UCSD:

  • Research
  • Instruction
  • Other Sponsored Activities
  • The Nimitz Marine Facility
  • The General Clinical Research Center

Indirect Cost Rate Agreement dated May 12, 2010.

Research Projects On Campus Rate 55%
Off Campus Rate 26%
Instruction On Campus Rate 53%
Off Campus Rate 26%
Other Sponsored Activities On Campus Rate 43%
Off Campus Rate 26%
MPL/Nimitz Marine Facility 18%

OMB Circular A-21 requires that indirect costs be allocated on the basis of modified total direct costs (MTDC). 

Modified Total Direct Costs (MTDC)

For sponsored agreements using a federally negotiated rate, the following budget items are excluded from MTDC:

  • Equipment
  • Capital Expenditures
    • Buildings, alterations, renovations, etc.
  • Patient Care Costs
  • Graduate Student Tuition Remission
  • Rental Costs of Off-Site Facilities
    • This category does not include other rental costs such as for hotel rooms, equipment, or automobiles
  • Scholarships and Fellowships
    • Financial aid paid directly to university students (scholarships, fellowships, stipends, dependency allowances).
  • The portion of subawards that exceeds $25,000
    • IDC is assessed only on the first $25,000 of any subaward, regardless of how many years the subaward is for.
    • When a grant/contract requires a new fund number, IDC will be re-assessed.
    • If the subaward is for another UC campus, the entire amount is excluded.

Indirect Cost Worksheet

An Indirect Cost Worksheet has been created to assist you with budget preparation. The file will help you estimate your budget IDC. By filling in the red numbers, the blue numbers will be automatically calculated according to pre-programmed formulas.

IDC for UC Programs

  • For the following three programs, the IDC rate is 25% using the standard federal MTDC base:
    • California Breast Cancer Research Program (CBCRP) 
    • California HIV/AIDS Research Program (CHRP) 
    • Tobacco-Related Disease Research Program (TRDRP)
  • All other University of California (UC) programs do not have any indirect costs, so the rate is 0%. So, all costs are direct costs.

IDC for Non-Profit and Other Non-Federal Agencies

Non-federal funding agencies have their own unique indirect cost rate and base on which it's assessed.

Not all funding agencies recognize the Federal MTDC base, e.g., some funding agencies may not consider equipment or tuition remission to be an exclusion from indirect costs.  

Please refer to the agency's guidelines to determine their policy and requirements on direct costs, indirect costs, and the appropriate exclusions to be calculated for your proposal budget. 

IDC for Industry Sponsors

UC San Diego's federally negotiated rates are used for all industry-sponsored research proposals. For more information on this policy, please see the Industry section.

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