Indirect Cost Rates (IDCs)

Sponsored Projects incur two major categories of costs-direct costs and indirect costs (IDCs) (sometimes referred to as facilities and administrative costs or F &A).

Direct costs are those that can directly and easily be attributed to a specific sponsored project, e.g., the cost of materials used conducting the project or the cost of salary and fringe benefits of the PI/PD for his/her time spent working on the project. IDCs are the less obvious costs, such as for the utilities in the classroom or laboratory where a project is being conducted or for the wages of purchasing and accounting personnel who provide administrative services supporting a project. IDCs are incurred for common or joint activities that cannot be easily attributed to a particular sponsored project; they are calculated based on a rate that is negotiated with UNC's cognizant federal agency, the Department of Health and Human Services.

NOTE: It is UNC's policy to request the full amount of indirect costs permitted in a funding agency's written proposal guidelines. Requests for reduced or waived indirect costs require strong justification and must be approved by the Assistant Vice President for Research and Sponsored Programs before a proposal with less than full allowed indirect costs is submitted to the sponsor.

Current IDC Rates: (applicable to all research, instruction and service projects)
 Effective Period On-Campus Projects Off-Campus Projects Rate Type
 7/1/2018-6/30/2019  38.0% MTDC  16.0% MTDC Provisional
 7/1/2017-6/30/2018  38.0% MTDC  16.0% MTDC Predetermined
 7/1/2016-6/30/2017 37.0% MTDC 16.0% MTDC

Predetermined

On-Campus or Off-Campus IDC Rate?

The on-campus IDC rate is to be used unless more than 50% of the project activities occur in facilities or at locations that are not owned by UNC, in which case the off-campus rate should  be used for the entire project.

MTDC-Modified Total Direct Costs

IDC rates are applied to a project's modified total direct costs.

MTDCs include the following:

  • Salaries and wages
    The cost of compensation of UNC faculty, staff, and student employees for performance of work on a sponsored project
  • Fringe Benefits
    The cost of fringe benefits related to such compensation if the cost of the benefits are consistent with those not associated with sponsored projects
  • Materials & supplies
    The cost of materials and supplies consumed or used in the performance of the work of a project
  • Services
    The cost of services provided by specialized facilities or other institutional service operations
  • Travel
    Expenses for transportation, lodging, subsistence and related items incurred by UNC employees who travel for purposes of the project
  • The first $25,000 of each subaward
    A subaward involves the transfer of a portion of the substantive work of a project to another organization or institution. The first $25,000 of the cost of every subaward is included in a project's MTDC,and IDCs are assessed on it. For the purpose of budgeting for IDCs, contracts for non-programmatic services and consulting agreements are not considered as subawards.

Costs that are excluded from the MTDC base (i.e., no indirects are calculated on the following direct costs):

  • Tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit
  • Capital Expenditures
    Buildings, alterations and renovations, and other capitalized expenditures
  • Patient Care
    The cost of routine and ancillary medical services (tests and procedures) provided by a hospital or clinic, but not laboratories of academic units or organized research units. Such cost should be based on a DHHS-negotiated patient care rate agreement or equivalent. Patient care does NOT include consulting physician fees, personal expense reimbursement such as for patient travel, or any other direct payments to patients, subjects, volunteers, or donors
  • Tuition Remission
    The cost of tuition and fee remission for UNC students, including graduate students
  • Rental Costs
    The cost of renting space and/or facilities not owned by UNC, including maintenance and utility costs if included in a rental agreement. Excluded rental costs do not include other types of rental, such as equipment or vehicles
  • Scholarships and Fellowships
    Financial aid paid directly to UNC students, including scholarships, fellowships, stipends, dependency allowances. Conference-type participant support costs are not included in this category
  • Subawards in excess of $25,000
    The amount of every subaward over $25,000 regardless of the duration of the agreement, unless a new subaward is issued under a competitive renewal or supplement from the prime sponsor that includes additional work and funding for the sub-awardee