Examples
Worked examples
- Is an instance
A postdoctoral researcher's salary charged 100% to the NIH R01 grant that funds their position is a direct cost.
- Is an instance
Reagents and consumables purchased specifically for the experiments described in a funded protocol are direct costs, distinct from the general lab-supply overhead the institution's indirect rate already covers.
Counter-examples
Looks similar, but isn't
- Not an instance
General departmental administrative support serving many awards at once is normally indirect, not direct, even though the underlying work superficially resembles something done for one award.
Editorial commentary
Direct costs are costs the institution can identify specifically with a particular federal award, project, or activity with a high degree of accuracy. The classification that matters under 2 CFR 200 is not what type of expense something is — it is whether the cost is allocable to one specific award. See Direct Cost vs. Indirect Cost for the full side-by-side comparison; this page focuses on the allocability test itself.
The allocability test, not a fixed cost-type list
2 CFR 200.413 sets the operative rule: a cost is allocable to a federal award if the goods or services involved are chargeable or assignable in accordance with relative benefits received. The same category of expense — salaries, supplies, even travel — can be direct on one award and indirect on another. What decides it is whether the specific expenditure was incurred specifically to advance that award’s objectives, not a fixed list of “always direct” or “always indirect” categories.
The consistency requirement
2 CFR 200.403(d) requires that costs incurred for the same purpose, in like circumstances, be treated consistently as either direct or indirect across all of an institution’s federal awards. An institution cannot charge the same category of administrative cost directly on one grant and recover it through its negotiated indirect-cost rate on another — doing so is a common Single Audit finding, because it effectively double-recovers the same cost.
Direct, but excluded from the MTDC base
Not every direct cost sits inside the Modified Total Direct Cost (MTDC) base that a negotiated or de minimis indirect-cost rate is applied to. 2 CFR 200.1 excludes equipment, capital expenditures, patient-care charges, tuition remission, rental costs, scholarships and fellowships, participant-support costs, and the portion of each subaward beyond the first $50,000 from MTDC — even though all of these remain direct costs of the award.
References
- 2 CFR 200.413 (Direct costs), 200.403 (Factors affecting allowability), 200.1 (MTDC definition) — Uniform Guidance, primary source verified via the eCFR API, 2026-08-22.
Also known as
DC · Direct project costs
Machine-readable encodings
Use in your systems
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