Budget in an externally funded research project

Always involve your department's economist early in the budget process.

Your budget is often divided into direct costs and indirect costs. Read more below about the different types of costs below.

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Direct costs are costs that are directly related to the project such as salaries, material, travel, equipment etc.

Note that the total salary costs in a budget must include salary ancillary costs (payroll tax etc) and holiday compensation, and if the project runs for several years, also salary increases. However, the funding agencies might have different requirements as to whether the extra salary expenses should be included in the salary costs, or indicated as a separate entry in the budget. Information about the University’s percentage for salary ancillary costs can be found here. Please note that these percentages change every year, so you cannot reuse an old budget directly.

Direct costs also include operating costs in the project, including travel, chemicals, participation fees and costs for buying analyses or consultant services. Remember that all costs should be indicated including sales tax.

When you purchase expensive equipment you need to check whether it is defined as movable property that should be depreciated. Check with department’s financial officer how you should enter a potential depreciation cost in the budget. Remember that depreciation costs should not be included in the direct costs that form the basis for calculating the indirect costs.

In addition to the direct costs, the research project should also pay its part of the costs that are common for the University and Faculty, such as library, computer networks, IT fees and administration; and common costs at the department, such as Head of Department remuneration, technical and administrative staff, copying machines etc. They are called indirect costs since they are not directly related to the project.

Indirect costs are calculated as a percentage of the direct costs (excluding depreciation costs). Check with your department’s financial officer which percentage is used at your department. Please note the percentage is updated annually.

Remember to always check with the funding agency how much of the indirect costs can be covered by the grant.

Please note that specific regulations apply when budgeting federal American grants.

Co-funding

If the percentage for indirect costs at your department is larger than what is allowed by the funding agency, it will in most cases be required that you or your department contribute with what is lacking. Some funding agencies can also have specific requirements for in-kind support. Always start by contacting your financial officer or head of department to confirm that you can apply for a certain grant, and that there is a plan for potential co-funding.

Full funding of the project

If the total costs for the project exceed the expected grant from the funding agency, other types of funding have to be added for the project to be performed to the planned extent. Assess whether you want to reduce the extent of the project to be able to apply for the whole sum from the current funding agency, or describe that you are applying for additional funding from other funders to cover the rest.

Authorisation from the department

Usually, the Head of Department or a financial officer must approve the budget before you can submit the grant application.

Contact

Always start by contacting your department's financial officer for help with your budget.

You or your financial officer is welcome to contact Research Support or the University’s central financial administration with questions.

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