Indirect cost rates
Greywood CPA helps grant recipients and government contractors choose, calculate and support their indirect cost rates, so overhead is recovered and holds up to review. We are a licensed CPA firm (Virginia Board of Accountancy firm license #134961) working nationwide, at a fixed fee.
Under the 2024 Uniform Guidance, grant recipients without a negotiated rate can use a de minimis rate of up to 15% of modified total direct costs. Organizations that need a higher rate negotiate one with their cognizant federal agency. Contractors on cost-type contracts use provisional billing rates and settle actual rates through annual incurred cost submissions.
Last reviewed: November 2026
| Option | How it works | Best for |
|---|---|---|
| De minimis rate | Up to 15% of modified total direct costs, no negotiation needed | Smaller organizations with simple cost structures |
| Negotiated rate (NICRA) | A proposal based on actual costs, negotiated with your cognizant federal agency | Organizations whose real indirect costs are above 15% |
| Pass-through rates | A rate accepted by the state or prime that funds you | Subrecipients without a federal negotiated rate |
The de minimis rate is applied to modified total direct costs (MTDC), not to the whole grant. MTDC generally includes salaries, fringe benefits, materials, supplies, services, travel and the first $50,000 of each subaward. It excludes items such as equipment, rent, participant support costs and the portion of each subaward above $50,000. Applying the rate to the wrong base is a common finding.
Contractors with cost-reimbursement or time-and-materials federal contracts bill using provisional indirect rates, usually for fringe, overhead and G&A. After year-end, they submit actual rates in an incurred cost submission, generally due within six months of fiscal year-end, and the government audits it. We help build the pools and allocation bases, calculate rates and prepare the supporting schedules.
Your funding mix, current rate and cost structure.
Scope and one fixed fee, in writing.
Pools, bases and rates built from your ledger, with a written methodology.
Schedules ready for your agency, prime or incurred cost submission.
Under the 2024 Uniform Guidance, recipients without a negotiated rate may charge indirect costs at up to 15% of modified total direct costs, without negotiating a rate.
Equipment, rental costs, participant support costs, tuition remission, patient care and the portion of each subaward above $50,000, among others. The rate applies only to the remaining direct costs.
When your actual indirect costs are meaningfully above 15% of MTDC and you can document them. A negotiated rate requires a proposal to your cognizant federal agency.
For contractors with cost-type federal contracts, generally within six months after the end of the fiscal year, unless the contracting officer grants an extension.
We quote one fixed fee in writing before any work starts, based on the number of pools, entities and the support you need.
Send us your last year's ledger summary and grant list. A senior CPA will send a fixed-fee proposal within 1–3 business days.