INDIRECT COSTS (OVERHEAD)
The indirect costs of research are institutional costs that benefit and support research. The costs cannot be attributed directly or easily to a specific research project, but they are nevertheless just as real and necessary for the conduct of research. They include such items as building space and utilities, university libraries, hazardous waste disposal, radiation safety, occupational safety, campus security, liability insurance, compliance with government policies and administrative services. The terms "indirect costs" and "overhead" mean the same thing and are used interchangeably.
The Canadian federal government supports the indirect costs of research funded by the National Granting Councils (TriCouncils) and Networks of Centres of Excellence (NCE). Simon Fraser and other Canadian universities receive an annual grant to contribute towards their indirect costs of research based on the average level of funding attributed to SFU investigators over the previous three years from those sources. The annual Government Indirect Costs program grant at SFU has historically been approximately 25% of the total grants attributed to SFU investigators.
SFU does not charge overhead on TriCouncil or NCE grants or on grants for which the sponsor’s guidelines prevent charging overhead per se. However, SFU does charge overhead on grants used to match Tri-Council or other non-Tri-Council grants or contracts. For example, industry funds used to match an NSERC grant must include 25% overhead. This policy has been harmonized with that of UBC, UVic and UNBC in regard to overhead charges.
SFU researchers must budget overhead, or eligible cost items in lieu of overhead, into applications for research funding using the rates indicated below and may not negotiate overhead with funding sponsors. The Office of Research Services (ORS) should handle negotiation of overhead. When developing their budget proposals, researchers must take into consideration individual sponsor cost guidelines and discuss the requirement for overhead in their applications with ORS prior to submitting their application. Questions concerning overhead or other eligible cost items to be charged in lieu of overhead should be directed to Ellen Loosley, in the Office of Research Services.
Generally, the rates to budgeted for SFU overhead or indirect costs are as listed below. However, ORS does individual negotiations with funding agencies, and depending on e.g. the deliverables, extent of reporting, and requirements for audit, these rates may vary:
- 25% of total direct costs on grant agreements from various sources, including industry
- 55.3% on salaries and wages on grants and contracts with US federal agencies
- 8% on total direct costs less equipment on NIH grants only
- 65% or 30% of salaries and benefits on contracts from Canadian government departments depending on the nature of the research; 2% on travel