Direct comparison
NICRA vs TRAC vs Horizon Europe vs RSF
How the US, UK, Horizon Europe, and Canada set and pay indirect research costs: negotiated NICRA, TRAC/fEC at 80%, a flat 25% rate, and Canada's RSF compared.
Side-by-side comparison
| Dimension | United States (NICRA) | United Kingdom (TRAC/fEC) | Horizon Europe | Canada (Research Support Fund) |
|---|---|---|---|---|
| Mechanism name | Negotiated Indirect Cost Rate Agreement (NICRA) | Transparent Approach to Costing (TRAC), producing full economic cost (fEC) | Flat indirect-cost rate (no formal name beyond "the 25% rate") | Research Support Fund (RSF), formerly the Indirect Costs Program |
| How the amount is set | Individually negotiated between the institution and its cognizant federal agency (commonly HHS or DOD/ONR) | Calculated per project via the sector-wide TRAC methodology; UKRI then funds 80% of the calculated fEC figure | Set centrally by the European Commission as a single flat rate applied to every beneficiary, no per-institution negotiation | Formula-based, calculated from a rolling multi-year average of the institution’s Tri-Agency grant funding |
| Governing framework | 2 CFR Part 200 (Uniform Guidance), Appendix III for institutions of higher education | TRAC methodology validated by UKRI, originating from the sector’s 1999 Transparency Review | Horizon Europe Model Grant Agreement / Framework Regulation (EU) 2021/695 | Tri-Agency (CIHR/NSERC/SSHRC) Research Support Fund program rules |
| Cost basis | Institution’s actual indirect cost pool relative to Modified Total Direct Costs (MTDC) | Directly incurred, directly allocated, and indirect/estate costs per TRAC rates, project by project | 25% of eligible direct costs, excluding subcontracting, third-party financial support, and costs already embedding indirects | Institution’s total recent Tri-Agency grant revenue, not any single project’s cost pool |
| Where the funds go | Added directly into each individual grant’s budget at the negotiated rate | Added into each individual project’s budget, but only 80% of the calculated figure is funded | Added directly into each individual grant’s budget at the flat rate | Paid to the institution as a separate allocation, outside any individual grant’s budget |
| Typical rate/amount | Commonly 25%–70% of MTDC at major research universities and medical centers; up to 15% de minimis MTDC available without negotiation | 80% of calculated fEC (the institution funds the remaining 20% itself) | Flat 25% of eligible direct costs, uniformly | Represents roughly 22% of Tri-Agency grant funding nationally on average (formula-based, not a flat per-grant percentage) |
| Renewal/renegotiation | Periodic renegotiation with the cognizant agency (multi-year agreements, typically renewed every few years) | Institution’s TRAC rates recalculated via the annual TRAC return | Fixed by programme rule for the life of Horizon Europe (2021–2027); not renegotiated per beneficiary | RSF allocation recalculated annually from the rolling Tri-Agency funding average |
| Recent development (2025–2026) | NIH’s February 2025 attempt to impose a flat 15% cap (overriding negotiated rates) was enjoined and the block was affirmed by the First Circuit in January 2026; negotiated NICRA rates remain in effect | UK institutions re-associated to Horizon Europe now run TRAC/fEC for UKRI awards alongside the flat 25% rate for Horizon Europe awards in parallel | Lump-sum funding (fixed, deliverable-triggered payment) has expanded across a growing share of Work Programme calls since 2024, with the same 25% indirect-cost logic still applied to the entitled direct-cost basis | No structural change to the RSF formula; Tri-Agency fund-administration rules (TAGFA, a separate document) were revised for an April 2026 effective date |
Common questions
FAQ
Can a US institution apply its own NICRA rate to a Horizon Europe grant?+
No. Horizon Europe applies its own flat 25% indirect-cost rate to every beneficiary’s eligible direct costs regardless of that institution’s domestically negotiated rate. A US institution’s NICRA rate applies only to its US federal awards, not to any Horizon Europe funding it receives.
Why does UKRI only fund 80% of full economic cost (fEC)?+
UKRI funds UK research council grants at 80% of the fEC figure calculated via TRAC by design — the remaining 20% is expected to come from other institutional resources. This is a deliberate co-funding policy, not a negotiated shortfall the way a lower NICRA rate would be in the US system.
Is Canada’s indirect-cost program officially called "MRT"?+
No confirmed official Canadian program uses the acronym "MRT." The current Tri-Agency (CIHR/NSERC/SSHRC) mechanism for indirect-cost compensation is the Research Support Fund (RSF), formerly named the Indirect Costs Program. Anyone searching for "Canada MRT indirect costs" is most likely looking for the RSF.
Did the US move to a flat indirect cost rate like Horizon Europe’s?+
No. NIH attempted a flat 15% cap on indirect costs in February 2025 (NOT-OD-25-068), overriding individually negotiated NICRA rates. Universities and a coalition of state attorneys general sued; a federal court blocked it with a nationwide injunction, and the First Circuit Court of Appeals affirmed that block in January 2026. The individually negotiated NICRA model remains the operative US mechanism.
Which of the four systems gives an institution the most indirect-cost recovery?+
There is no single answer — it depends on the specific institution’s negotiated US rate, its UK TRAC-calculated fEC figure, and the scale of its Tri-Agency funding, none of which are directly comparable on a percentage basis alone since the four systems use different cost bases and, in Canada’s case, pay the institution rather than the individual grant.
Going deeper
