All funded research grants, contracts and agreements are required to include indirect cost recovery.
The required indirect cost recovery for research projects is:
- 25% on all non-industry funding (governemnt and non-profits)
- 40% of all direct costs on industry funding (any projects initiated before May 1, 2015 may continue to charge the previous rate of 25%)
The only exceptions to these rates are funds from any of the Tri-Council funding agencies (UBC recovers indirect costs for Tri-Council funds through the Federal Research Support Fund formerly the Indirect Costs Program. The only exception is the SSHRC-administered Tri-Agency New Frontiers in Research Fund. Applicants to this fund should contact ORS about building indirect cost recovery into their application.) and funds through grant applications which specify an alternate rate.
Many of the verified exceptions to the standard UBC rate of recovery are listed in the Indirect Costs of Research Verified Rates Table.
Since May 1, 2015, all discretionary powers for the recovery rate of indirect costs (for projects not covered by the standard or published verified rates) has rested with the Deans of the Faculties and not with the Vice-President, Research & Innovation Office.
Below is a sample budget development process.
A researcher creates a proposal for a research project with a government or non-profit partner with the following direct costs:
Direct Costs
| Principal Investigator Honorarium | $8,000 |
| Graduate Students (MSc x 2) | $38,400 |
| Research Associate (Project Mgr.) | $40,000 |
| Technician | $14,400 |
| Consumables | $38,800 |
| Equipment | $12,000 |
| Travel and Subsistence | $4,800 |
| Non-University Consultant | $3,600 |
| Total Direct Costs | $160,000 |
The following models below demonstrate how to present to the sponsor a budget for this project utilizing the 25% recovery rate for government and non-profit projects.
Unless the sponsor specifies in writing that they require the indirect costs of research to be presented as a separate line item, the indirect cost should be built into each budget line item, as is customary for budgets.
Preferred “Price” Model
(25% Indirect Cost Built Into Pricing)
| Principal Investigator Honorarium | $10,000 |
| Graduate Students (MSc x 2) | $48,400 |
| Research Associate (Project Mgr.) | $50,000 |
| Technician | $18,000 |
| Consumables | $48,500 |
| Equipment | $15,000 |
| Travel and Subsistence | $6,000 |
| Non-University Consultant | $4,500 |
| Total | $200,000 |
Alternative “Cost” Model
(only if required by Sponsor) (25% Indirect Cost Separated)
| Principal Investigator Honorarium | $8,000 |
| Graduate Students (MSc x 2) | $38,400 |
| Research Associate (Project Mgr.) | $40,000 |
| Technician | $14,400 |
| Consumables | $38,800 |
| Equipment | $12,000 |
| Travel and Subsistence | $4,800 |
| Non-University Consultant | $3,600 |
| UBC Indirect Costs (25% of direct costs) | $40,000 |
| Total Direct Costs | $200,000 |
Tri-Council Matching or Partnered Grants
For Tri-Council grants requiring funding from one or more funding partners, the Tri-Council agency matches only the direct costs of the partners. Examples of these programs include, NSERC Collaborative Research and Development Grants, NSERC Idea to Innovation Grants, SSHRC Partnership Grants, CIHR Industry Partnered Collaborative Research Program, CIHR Proof of Principle Grants. In these cases, the agency may require that direct and indirect costs be shown separately in the budget submitted to the Tri-council agency. In all cases, an indirect cost recovery rate of 25% (for projects initiated after May 1, 2015, this rate will be 40% for industry partners) must be applied to the matching funds provided by the partner. Indirect costs should not be applied to the funds requested from the Tri-council agency. The only exception is the SSHRC-administered Tri-Agency New Frontiers in Research Fund. Applicants to this fund should contact ORS about building indirect cost recovery into their application
Departmental, Unit and Faculty-Specific Fees
Some departments or units require that an “administrative fee” be charged to each project. It’s expected that consistent recovery of indirect costs of research will alleviate the need for these additional fees. If these additional fees are required, however, indirect cost recovery must still be applied at the standard rate to all direct costs, including the administrative fee.
Sub-Awards to UBC
In multi-site projects, it’s the responsibility of the main site to apply on behalf of each sub-site the appropriate indirect cost recovery for that institution. As a sub-awardee, UBC requires 25% indirect costs recovery to be included in funds from the main site. The only exceptions to this are sub-awards from other academic institutions who’ve received grant funding (e.g. from Tri-Council agencies or NIH), in which UBC has approved the alternate rate. All industry projects must recover indirect costs at the standard rate of 40% , irrespective of where the industry sponsor receives its funding.
Machine and Equipment Purchase Grants
Grants for which 100% of the funds are to be applied toward the purchase of equipment, and not directly connected with a specific research project, are exempt from indirect-cost recovery.