NIH Implements Indirect Cost Rate

The National Institutes of Health (NIH) provides significant federal funding through grants, which include payments for indirect costs related to facilities and administration (45 CFR 75.414(a)). Facilities costs cover depreciation, capital improvements, interest on debt, and maintenance, while administration costs include general expenses like accounting, personnel, and executive management.

Typically, NIH applies an indirect cost rate negotiated by an overseeing agency (Grants Policy Statement at IIA-68; 45 CFR 75.414(c)(1)). However, NIH has the authority to deviate from this rate for individual or classes of grants, including those awarded to institutions of higher education (IHEs) (45 CFR Appendix III to Part 75, § C.7.a). When doing so, NIH must establish and publicly disclose its policies and criteria for these deviations (45 CFR 75.414(c)(3)).

Effective immediately, NIH has implemented a standard indirect cost rate of 15% for all grants, replacing individually negotiated rates, as outlined in this updated policy guidance.

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