Step 6: Estates and Indirect Costs

There are some major items of expenditure in support of research activities made both by the Budget Centre and/or centrally by the University. These costs are important as they ensure that the University has a well-maintained infrastructure and administrative support to enable research activities to be carried out. The costs are Estates and Indirect Costs.

These costs replace the previous 'overhead' charge that was applied to research projects. Whereas the overhead was a fairly arbitrary charge, the Estates and Indirect costs are true costs that the University is incurring and are based on the expenditures contained within the audited annual accounts.

The calculation of Estates and Indirect Costs is a mandatory requirement for all HEI's, and is done using the same methodology. The costs that are calculated will be different, but they will have been calculated in a consistent way. Benchmarking studies were carried out across the sector to ensure this.


You should note Estates costs are actually classed as a Directly Allocated cost but because the process for obtaining Estates Costs and Indirect Costs is the same, they have both been included in Step 4. of this guide.
When you asked your Accounting Team for Salary Cost information for Directly Incurred Costs or Directly Allocated Costs, they will have provided you with the Estates and Indirect Cost for your project. The costs will have been expressed as a £ per Academic staff FTE effort on the project.

See a full example of a Typical Costing