Indirect Cost Rates

All Sponsors* July 1, 2014 - June 30, 2015

All Sponsors* July 1, 2015 - June 30, 2016

*State of Michigan

Varies widely, depending on the specifics of individual projects. Contact your school/college/institute/center administrationf for assistance with State of Michigan indirect cost rates.

Applying Indirect Cost Rates

Class Codes for Sponsored Projects provides definitions of "research," "instruction," "other sponsored activity," and "clinical trial site activity."

MTDC: The indirect cost rates for federal projects and most projects sponsored by industry are applied to a modified total direct cost (MTDC) base. The rates are applicable to all direct costs with the exception of the following:

  1. Permanent equipment items with a unit value of $5000 or more and a life expectancy of two years. Nonexpendable items valued at less than $5000 or with less than a two-year life expectancy should be budgeted as materials and supplies.
  2. Indirect cost rate is applied to only the first $25,000 of each subcontract or subgrant.
  3. No indirect cost recovery is allowed on costs for alteration or renovations of facilities included in a proposed budget.
  4. Tuition charges are excluded from the base on which indirect costs are calculated. Budget proposals should use a modified total direct cost (MTDC) base that excludes tuition charges.
  5. Patient care costs.

Is it an Off Campus Project?

To determine whether a project qualifies for the off-campus rate, read the off campus definition and hints provided there.

Research Vessels

The indirect cost rate for research vessels is 25.0%.

Specialized Service Facilities

As of 7/1/2010, the University no longer applies or recovers a Specialized Service Facility Fee (SSFEIDC) or Quality Assurance Fee (QAF) related to animal charges on sponsored projects (funds 20000, 25000). All animal purchase and housing for all external sponsors are now treated as any other supply or service cost with no change to the Indirect Cost recovery.

The QAF at 20% will be applied to all animal charges on non-sponsored projects (funds 10000, 30000, 40000, 54010) within the Medical School.


If the University offers to cost share a portion of the direct costs of a project, the indirect costs associated with those direct costs may also be used for cost sharing. If the sponsor limits indirect costs, the difference between the full recovery of indirect cost and what is allowed by the sponsor may be shown as a University cost-sharing contribution.

References, Resources and Related LInks

Reviewed: February 17, 2015