Indirect costs, also called overheads, are general operating costs incurred within the project but not directly linked to the project tasks. Indirect costs contribute to the proper project implementation, but they are also indispensable to successfully run your business.
Direct costs are all the costs incurred in direct relationship with the activities performed in the project, specified in the estimated project budget. These costs can include for example purchase of services, equipment, software, travel expenses etc.
Any cost you declare as a direct cost has to be accompanied by supporting evidence showing the direct link between this cost and a specific activity of your project.
What are the indirect costs?
- office rental costs
- postage, insurance
- general office supplies
- telephone and internet costs
- heating, electricity
- fees for general accounting and legal service etc.
How should I include indirect costs in my project budget?
You do not have to specify indirect costs in the project budget. In H2020, the indirect costs are charged at a flat rate of 25% of the eligible direct costs, excluding costs of subcontracting and in-kind contributions by third parties outside of the beneficiary’s premises.
How to calculating indirect costs?
Company A is beneficiary under a GA and has incurred the following costs:
- 100 000€ personnel costs
- 20 000€ subcontracting costs,
- 10 000€ other direct costs (consumables).
Eligible direct costs: 100 000 + 20 000 + 10 000 = 130 000€
Eligible indirect costs: 25 % of (100 000 + 10 000) = 27 500€
Total eligible costs: 157 500€
Do I need proofs for the indirect costs?
This flat rate is automatically calculated by the IT system in the financial statement and is paid regardless of the actual amount of indirect costs.
Consequently, you do not need to have any supporting documents (such as accounting statements) to prove these costs.
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