Examples
Worked examples
- Is an instance
A university applies its federally negotiated 55 percent F&A rate to the MTDC base of an NIH grant to recover facilities and administrative costs.
- Is an instance
A first-time federal recipient with no negotiated rate elects the 2 CFR 200.414(f) de minimis rate instead of negotiating its own.
Counter-examples
Looks similar, but isn't
- Not an instance
A cost specifically identifiable with one award, like a piece of lab equipment bought for one project, is a direct cost, not an indirect one, regardless of its dollar size.
Editorial commentary
Indirect costs — also called overheads, Facilities & Administrative (F&A) costs in the US, or full economic costing components in the UK — are the institution’s recovery for shared infrastructure that no single award can fairly be charged for directly: building depreciation, utilities, library services, sponsored-programs administration. They sit opposite direct costs; see Direct Cost vs. Indirect Cost for the full comparison.
Two ways to recover them: negotiated rate or de minimis
Most research-intensive US institutions have a federally negotiated indirect-cost rate agreement (NICRA), renegotiated periodically with a cognizant federal agency. An institution without a current negotiated rate — including a provisional one — may instead elect the de minimis rate under 2 CFR 200.414(f). OMB’s Uniform Guidance revision raised this general de minimis rate from 10 percent to up to 15 percent of Modified Total Direct Costs (MTDC), effective for awards issued on or after 1 October 2024 — primary-source verified against 2 CFR 200.414 via the eCFR API, 2026-08-22. The eligibility test is “no current negotiated rate, including provisional,” not “never had a negotiated rate”: an institution that once had a negotiated rate but does not currently have one, including a provisional one, is eligible to elect the de minimis rate. For a worked walkthrough of applying either a negotiated or a de minimis rate to an actual budget, see How to Calculate Indirect Costs (F&A) vs. Direct Costs.
NIH is a documented exception
NIH Guide notice NOT-OD-26-072 (20 April 2026) reverted NIH awards specifically back to the longstanding 10 percent de minimis rate and a $25,000 MTDC subaward-exclusion threshold, citing an FY2026 appropriations rider requiring continued application of 45 CFR Part 75’s indirect-cost treatment to NIH awards. This is secondary-sourced (grants.nih.gov blocks automated fetches); treat it as reported, not primary-confirmed, and re-verify directly against a live NIH source before citing it as settled for more than about a year.
UK and EU equivalents
UK institutions use the Transparent Approach to Costing (TRAC) methodology to calculate full economic costs (fEC); UKRI funds research council grants at 80 percent of fEC. Horizon Europe applies a flat 25 percent indirect-cost rate to eligible direct costs, excluding subcontracting and costs that already embed indirect elements.
Checking this against the current guidance
Whether your institution currently qualifies for the de minimis rate turns on the exact status of your own negotiated agreement — expired, provisional, or never issued — which the page above cannot see. The answer depends on which negotiated rate agreement’s own current status you are working to, and the page above states the general rule.
It searches CASRAI’s indexed corpus of research-administration guidance and cites the passage behind each claim, so you can open the source and check it rather than take its word — and it says so when the corpus does not cover something instead of guessing. Two questions a day are free while you are signed out, no account and no card. Everything CASRAI publishes stays free to read.
Frequently asked questions
If our negotiated indirect cost rate agreement has expired and a new one isn’t finalized yet, do we count as having ‘no current negotiated rate’?
The eligibility test turns on whether a current agreement exists, including a provisional one. An expired agreement with a renegotiation already underway is a specific, fact-dependent case that your own sponsored-programs office and cognizant agency need to confirm together — don’t assume either answer without checking your agreement’s own terms and the cognizant agency’s current position.
Is TRAC-derived UK full economic costing the same calculation as the US F&A rate?
No. TRAC produces an institution-specific full economic cost figure that UKRI then funds at a fixed 80 percent — a different mechanism from a US NICRA’s negotiated percentage of MTDC. The two aren’t interchangeable, and a UK fEC figure can’t be quoted as if it were a US F&A rate.
Does the Horizon Europe flat 25 percent indirect rate apply to subcontracting costs?
No. Horizon Europe’s flat 25 percent rate applies to eligible direct costs and excludes subcontracting and costs that already embed indirect elements, so those categories don’t get the indirect add-on a second time.
If NIH reverted to a 10 percent de minimis rate, does that reversion apply to other federal agencies too?
No. NOT-OD-26-072 is an NIH-specific notice; the general government-wide 2 CFR 200.414(f) ceiling of up to 15 percent is unaffected for every other federal agency.
References
- 2 CFR 200.414 (Indirect (F&A) costs), 200.1 — Uniform Guidance, primary source verified via the eCFR API, 2026-08-22; NIH NOT-OD-26-072, secondary-tier.
Also known as
Overheads · F&A · Facilities and Administrative costs · On-costs
Machine-readable encodings
Use in your systems
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