New Indirect Cost Rates
The indirect cost rates for some types of research will increase annually every year through FY27 (which begins July 1, 2026). Indirect cost rates are meant to reimburse the university for the investments it makes to support research, but which can鈥檛 easily be attributed to a specific project. This can range from the cost of buildings and laboratories where research takes place to general supplies like paper, toner, and pencils. Utilities, maintenance, and secretarial or general administrative expenses also fall under indirect costs. In order for the university to be reimbursed for the money it spends to support research and sponsored programs, indirect costs are charged at the established rate on top of the total project cost.
Current rates
The university鈥檚 current rate agreement went into effect on July 1, 2023 and applies to all grants, contracts and other agreements with the federal government. The rates are divided into four categories: Organized Research, Instruction, On Campus Other, and Off Campus. The rates for three of these categories will be the same throughout the agreement:
| Instruction | On Campus Other | Off Campus |
| 44.5% | 38.5% | 26% |
To be eligible for the off-campus rate, you must include rent as a direct cost in your budget.
The rates for Organized Research will increase annually as follows:
| FY25 (begins 7/1/2024) | FY26 (begins 7/1/2025) | FY27 (begins 7/1/2026) |
| 44% | 45% | 46% |
This incremental change also affects multi-year projects. If your project starts in FY24 and ends in FY26, each year will be charged a different indirect cost rate.
Visit our website for the most up-to-date information on the university鈥檚 indirect cost rate.
Notable Information
These new rates do not affect current awards that are calculated with the previous rate agreement. The rate will stay the same on grants and contracts awarded before FY24, even on multi-year projects.
For proposals submitted with the previous rates, the rate used during the proposal process will be the rate applied to the subsequent award.
The definition of the off-campus indirect cost rate has changed. The off-campus rate should be used if the project meets any of the following criteria:
A. More than 50% of a project is performed in off-campus facilities not owned by the institution
or
B. More than 50% of a project is performed in off-campus facilities, and rent is directly allocated or charged to the project.
A project can only use one indirect cost rate. If any of the above criteria are met, then the off-campus indirect cost rate will apply to the entire project.