Creating Proposal Budget

Rensselaer seeks to recover the full cost of sponsored research, including both direct and indirect costs, from the sponsor. Indirect costs are charged as at the federally negotiated rate applied to modified total direct costs, as described below. Only in this manner is Rensselaer able to use its other resources to support teaching and related activities.

Direct Costs

Direct costs are directly attributable and chargeable to a specific sponsored project or activity. Direct costs must be allowable by both the sponsor and Rensselaer and typically include personnel, fringe benefits, travel, equipment, subawards, and other direct costs such as materials and supplies, tuition, participant costs, etc.

Indirect Costs

Indirect Costs (IDC) also known as “Facilities and Administrative Costs” (F&A) are costs incurred by the Institute in general support and management of research and other sponsored activities, but cannot reasonably be directly attributable to a specific project or activity. Indirect costs include depreciation of buildings and equipment, operation and maintenance (including utilities), departmental and general administrative research support, and the library.


Rensselaer's standard indirect cost rates for research and other sponsored activities that occur on or off-campus are negotiated with the Office of Naval Research and can be referenced on our Rates page.


Indirect costs are generally calculated by applying the appropriate rate to a modified total direct cost (MTDC) base. The MTDC base consists of all direct costs, excluding:

  • Capital expenditures (i.e., equipment, building alterations, and renovations)
  • Scholarships/Fellowships
  • Tuition
  • Participant support costs
  • Costs in excess of $25,000 for each subcontract


Description of Budget Categories


The names or position description, salary, and estimate of the percentage of time each person will work on the project. Included under personnel are payroll charges for any Rensselaer employee or student working on the project. All personnel costs must conform to sponsor guidelines and restrictions.

Faculty with academic appointments may request a portion of their 9-month academic-year salary and up to 12 weeks of summer supplemental salary, depending upon sponsor guidelines.

Other Professional Staff with calendar-year appointments may recover the applicable portion of their 12-month salary.

Full-time Graduate Student support includes:

  • Tuition
  • Calendar Year Stipend

Undergraduate Students are paid on an hourly basis as needed.


Fringe Benefits

Fringe benefits are calculated as a percentage of salaries and wages, less student compensation, regardless of the specific benefits received by individuals. Fringe benefits cover the costs for insurance (health, unemployment, life, long-term disability), FICA, workman's compensation, pension, and scholarships for employee dependents.

Fringe benefits costs cannot be waived and Rensselaer is required to use the fringe benefit rate that is negotiated annually with the federal government. Rates usually change each July 1, with the start of the Institute’s fiscal year.



Equipment is defined as any item having an acquisition value of at least $3,000 and a life expectancy of at least two years. Components under $3,000 may be considered equipment if they are purchased to fabricate specialty equipment or systems to significantly upgrade an existing piece of equipment.

Equipment requested from the sponsor must be necessary for the project and must not be currently available for use at Rensselaer. All equipment requests are subject to sponsor guidelines, and most sponsors do not allow the purchase of general-purpose equipment, such as office equipment.



Travel is an allowable cost to disseminate research results or to participate in any sponsor-mandated events. You will need to specify whether the travel is domestic or foreign and the amounts needed for each.

To help assess whether travel costs are reasonable, most sponsors want to know the destination and purpose of the trip or the name of the meeting you want to attend. Some sponsors also require the number of travelers, number of days, airfare, and per diem costs for each trip planned.


Participant Costs

Participant support are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects (2 CFR 200.75). Provide an estimate of participant costs, by category. Ordinarily, any changes from costs in this category to another category of expense require to sponsor prior approval.

Materials and Supplies

Indicate the categories required (glassware, chemicals, etc.) and the estimated cost for each category.


Estimate the cost of documenting, preparing, publishing, disseminating, and sharing of research findings.

Consultant Services

Consultants are individuals providing technical assistance who are not Rensselaer employees. Your estimate of the cost for the consultant may include payment for professional services, up to the sponsor's maximum allowable rate, and related costs such as per diem and travel. The individual's expertise and the need for obtaining his or her services should be described in the proposal.

If Rensselaer has the right to control and direct the individual with regard to the result to be accomplished, but not the process by which the result is accomplished, the individual will either be classified as an independent contractor or consultant.

Before an individual can be paid as an independent contractor or consultant, the Office of Human Resources must review a description of the services to be performed to determine whether the individual should be considered an employee, or an independent contractor or consultant (see Rensselaer's Independent Contractor or Consultant Policy). This review is essential to make sure the individual is properly classified according to federal regulations.

Sponsor approval is generally required for use of a consultant. In many cases, issuance of an award by the sponsor constitutes approval of consultants listed and justified in the proposal. RAF will advise you if additional approval is needed.


Computer Facility Fees

Estimate the cost for use of Rensselaer's computing facilities, based on the rates for the specific facility you plan to use. Some sponsors will request a copy of the facility's published rates.


List the name of the subcontracting institution and its total project costs (including direct and indirect costs). The subcontracting institution should provide us a detailed budget and an organizational letter of endorsement, which are incorporated into Rensselaer's proposal to the sponsor.

Other Direct Costs

This includes items such as machine shop services, maintenance and service contracts, sample analysis, and facility usage fees.

Other direct costs include additional allowable and allocable costs essential to conduct the project not captured in the above categories.


Budget Justification

You must be able to fully document and justify the amounts requested in each budget category.

This documentation can be in your text or in a separate section following the budget. The amount of detail required will vary by sponsor. Items for which sponsors frequently request explanation are administrative effort, equipment, travel, materials, subcontracting, and computer time.

The grant administrator working on your proposal will contact you if the sponsor requests additional budget justification after the proposal is submitted.

Back to top