In most cases, indirect (also called F&A) costs are calculated using an MTDC base. In some cases, a sponsor will have a published limitation on indirect costs, so we would use a TDC base (Scenario 1). In less frequent cases, a sponsor may require that the indirect costs be limited to a percentage of the total cost of the award (Scenario 2). See examples below.

Scenario 1: Indirect Costs Limited to Percentage of Total Direct Costs

To determine how much direct costs are allowed, divide total costs by 1.XX where XX is the indirect cost rate expressed as a decimal (e.g. 20% = 0.20).

Total Costs / (1.XX) = Maximum Direct Costs

Direct Costs x F&A rate = F&A Costs

Maximum Direct Costs + F&A Costs = Total Costs

Example 1: Total Costs Limited to a Specific Amount

Applicants may request up to $100,000, and the F&A rate is limited to 20% of total direct costs.

Scenario 2: Indirect Costs Limited to Percentage of Total Award

To determine how much may be requested for direct and indirect costs, use the following formulas, with F&A rate % expressed as a decimal (e.g., 20% = 0.20):

Direct Costs / (1.0 - F&A rate %) = Total Award OR Total Award x (1.0 - F&A rate %) = Direct Costs

Total Award x F&A rate % = Indirect Costs

Direct Costs + Indirect Costs = Total Award

Example 2a: Total Costs Limited to a Specific Amount

Applicants may request up to $100,000 total costs, and the F&A costs may not exceed 20% of costs: