What is the difference between a direct cost and an indirect cost?
A direct cost is any cost that can be easily identified with a specific project (grant/contract): e.g., Salaries and Wages, Materials & Supplies, Subcontracts, Consultants. An indirect cost is any cost that cannot be easily identified (or it would not be cost effective to identify) to a specific project, but identified with two or more final cost objectives. There are three types of indirect costs: Fringe Benefits: services or benefits provided to employees, e.g., Health Insurance, Payroll Taxes, Pension Contribution, Paid Absences, etc Overhead: indirect costs associated with the performance of a project, e.g., Facility Costs (rent, heat, electricity, etc.), General Laboratory Supplies, etc. G&A: indirect costs associated with the overall management of an organization, e.g., Presidents Office, Human Resources Office, Accounting Office, office supplies, etc.
