6 Key Facts about the new Personnel Unit Costs in Horizon Europe

A groundbreaking change is on the horizon for Horizon Europe projects – the introduction of personnel unit costs.

This innovative method promises to simplify cost reporting for beneficiaries and allow more transparent financial management. But can we count on that?

Here are six key facts you need to know about this exciting development.

1. What are Personnel Unit Costs?

Personnel unit costs are a new optional method for reporting personnel costs in Horizon Europe projects. Instead of calculating individual daily rates for each staff member, beneficiaries can now establish a single daily rate, applicable to all personnel working on the project.

2. How to calculate the Daily Rate for personnel unit costs?

The average daily rate is based on historical data of the total actual salary from the last closed financial year for all types of staff members. Then, this total is divided by the number of Full-Time Equivalents (FTEs) in the organization.

What’s fascinating is that all salary components typically excluded from grant calculations, such as bonuses and extra payments, are now eligible and included as part of the salary!

On top of that, the calculation considers all staff members’ salaries equally, without distinguishing between SME owners, junior, senior staff, or student positions.

Finally, it’s worth noting that there’s a cap on average monthly rates, which varies by country. This cap is determined by multiplying 9,618 Euros by the country coefficient. This measure is to prevent daily rates from becoming unreasonably high and to ensure fair compensation for everyone.

3. Who is applicable?

It seems the unit cost option is not available for everyone. According to the official EU Decision, the unit costs option starts in May 2024 but only for beneficiaries who haven’t started yet, so right now it is only for future proposals or projects in the GA preparation.

4. How to request Personnel Unit Costs?

Beneficiaries interested in personnel unit costs can request them through the Funding & Tenders portal in the ‘My Organisation’ section. This functionality will be available after May 1, 2024.

You will be required to provide an independent audit certificate proving the calculation of the unit cost is made based on actual historical data.

5. Can the Daily Rate be updated during the project?

The unit cost remains valid for a minimum of two years. It means the beneficiary can ask for an update every two years, following the same process as the initial request. It’s important to note, though, that any updates to the unit cost only apply to new grants. Ongoing projects are not eligible for adjustments to increase the unit cost.

Once the rate is approved before signing the grant agreement, it stays the same for the whole project, whether it’s two or four years long.

6. Is it possible to revert to actual costs?

The beneficiary has the option to switch back to actual costs only once! This could happen if unit costs didn’t simplify things as expected. The change back to actual costs will affect only future grants, ongoing grants will not be impacted at all. It means that once you decide on the unit cost method for a project, you need to stick with it till the end.

Not sure if this option is good for you? Don’t hesitate to contact us at hello@getpolite.eu. We’ll help you figure it out!