Recovering indirect costs

When preparing your budget it is important to include University indirect costs.

At the time of award this money will be collected regardless of whether it was originally included in your budget or not.

Why it matters

The Indirect Costs Recovery recognises that there are real indirect costs to the University in undertaking these activities:

  • use of buildings;
  • services;
  • facilities;
  • administration;
  • libraries and
  • insurance etc.

Universities Australia has estimated that this cost is at least 125% of direct costs for laboratory based research and 92% for non-laboratory based research.

The University’s Indirect Cost Recovery recovers only a portion of these costs - we charge indirect costs at 35% of the total cost of the proposed research.

Organisations that fund research at Universities should be prepared to pay the indirect costs. These organisations include industry, government organisations and others. If the fee is not included, the Universities is effectively subsidising the work from its own resources.

Activities to which the recovery of indirect costs applies

  1. research contracts and grants
  2. consultancy work conducted on behalf of the University
  3. provision of services on behalf of the University
  4. postgraduate student stipends
  5. any other work that involves the use of University facilities and resources.

General principles for calculating indirect costs for recovery

For the activities listed above, the project budget sum must cover, as a minimum, all direct costs including salary on-costs. The indirect costs to be recovered are then added to the contract total.

Indirect costs to be recovered for these activities are set at 35% of the total sum.

Where appropriate, salary (including on-costs) for the principal investigator and other members of University staff should be included in the contract sum, prior to calculation of the indirect cost recovery.

The indirect cost recovery fee applies regardless of whether or not the activity is also classified as a commercial activity and therefore also subject to the commercial guidelines.

Cross-institution work

In cases where work is carried out using the facilities of another organisation, the University may enter into an agreement with that organisation to ensure that infrastructure costs are shared fairly according to the resources contributed by each organization.