When preparing the budget for research grant applications or negotiating a budget for contract research, it is important to consider both the direct costs and indirect costs (overheads) associated with the proposed program of research.
Direct costs are directly attributable to a research project. These costs usually include salaries (and salary oncosts), the cost of laboratory consumables, travel, purchase of equipment and maintenance.
Indirect costs are the real costs incurred by the University to support the research project, through the provision of services and facilities. These could include, but are not limited to: the provision and maintenance of laboratory space and the associated utilities (water, electricity, gas etc), administrative support, and access to library facilities. Where these indirect costs or overheads are not able to be recovered through the funding provided by the grantor, the program of research is then being subsidised by the University.
Research budgets should be calculated following a comprehensive assessment of the direct and indirect costs associated with the program of research undertaken at the University, relevant University Policy and the conditions of funding likely to be applied by the agency or sponsor providing the funds.
For further details and overview, please see Budget Preparation.