Costing a research project

There are two types of costs associated with a project – direct costs and indirect costs.

Direct costs are those that can be directly attributed to the activity of the research project. Indirect costs are institutional overhead costs that benefit and support the research activity and include real costs to the University such as the operations and maintenance of facilities and buildings, use of libraries, staff services, financial services, and research administration services.

It is important that the real cost of the research project is captured. This is distinct from the price charged for the project, which is dealt with later.

Direct costs must be reasonable and able to be allocated to the research project. If they are to be charged to the funding organisation then they must also be allowable under the funding rules. Otherwise they should be captured as in-kind costs of the project. The total cost versus the price, is a factor that will be considered by Heads of Area when approving the project.

‘Padding’ direct costs, which is different from contingency planning, can result in failure to withstand audit.

Salary and salary on-costs


All base salaries, whether they are being funded or provided in-kind, should be consistent with the latest salary scales available on the HR website. Things that should be considered when costing salaries are:

  1. Increments and pay increases under the EBA should be factored in when the project exceeds one year;
  2. Severance pay – if an individual factored into the budget is on a limited term contract, then provisions should be made to cover the severance liability being accrued over the course of this project;
  3. Contingency costs – in the event that a replacement individual is required in the course of the project what is the normal salary scale for that skill set, or if the time allocation to complete a task is exceeded, what ability is there in the budget to absorb these additional costs?

Salary on-costs – Grants

Salary on-costs are legislative (payroll tax, worker’s compensation) or contractual (EBA) obligations that must be paid and therefore must be included in all personnel costings.

Most grants do not preclude the research team from taking annual leave through the course of the grant. Therefore, theoretically, there should not be a leave liability accrued over the course of a grant.

Salary on-costs for grants can be calculated using the on-cost available from the HR on-cost calculator website and:

[Salary On-cost] – [Annual Leave Entitlement 10.65%] + [Leave Loading 1.3%]

Salary on-costs – Fee for service/contract research

Salary on-costs are legislative (payroll tax, worker’s compensation) or contractual (EBA) obligations that must be paid and therefore must be included in all personnel costings.

Fee for service or contract research is normally based upon a flat fee and/or hourly cost premise. Therefore a research team accrues a leave liability over the course of a project.

Salary on-costs for fee for service/contract research is found on the HR on-cost calculator website.

Student costs

One overarching principle must be considered if students (undergraduate or postgraduate) are to be involved in a research project – that the involvement of a student is directly tied to their achievement of their qualification (because if it is not about their degree, then they are not involved in their role as a student), and there must be demonstrable benefit to the student.

Students do not represent a cheap source of labour to undertake a project. Stating that involvement in a project will be ‘good for’ the student is unacceptable.

The Graduate Research School must be consulted regarding appropriate scholarship values, top-ups and other costs where a Higher Degree by Research student is involved. The Scholarships office in Student Services must be involved if there are scholarship, top-ups or other costs associated with undergraduate or postgraduate non-research students are involved.


When equipment is factored into a research project there has to be consideration regarding whether it is appropriate that the customer be charged the full cost of the equipment under this project.

Equipment is also rarely a one off and stand-alone cost. Several things need to be considered when factoring equipment into a costing, including:

  1. Does the equipment require specialist facilities for housing (e.g. three phase power; dedicated air conditioning), and if so, how are these costs being covered?
  2. Is the area willing to accept the depreciation associated with the equipment?
  3. What are the maintenance requirements and what is required to meet these during the warranty period and beyond?
  4. What are the operating costs, including consumables?
  5. Is a trained technician required for use, and is this skill set available to the project, and how will it be covered during the effective life of the equipment?

Publication costs

Several funding bodies (including the ARC and NHMRC) require the outcomes of their funding be placed in the public domain. Other reasons for open access include the potential to increase the impact of the research by increasing the visibility and exposure of the research, and it removes the barriers preventing others from accessing the research (see the Open Access Library Guide).

Researchers are encouraged to publish the outcomes of their research in the highest quality outlets (publishers for books/book chapters; scholarly research journals for articles) relevant to their discipline. An increasing number of outlets charge publication fees and/or require the author pay an article processing charge (APC) to make the article open access. Where possible or allowable the researchers should consider whether publication costs are something that should be included in the budget, particularly if the article will benefit from immediate open access. However, in most cases authors are not required to pay an APC in order to meet the open access requirements of the ARC and NHMRC and can fulfil their obligations by making the article available via eSpace, Curtin’s institutional repository.

Third party costs

Any funding going to a third party should be factored into the Direct Costs section of the budget. Non-monetary third party contributions should not be part of a costing model.

Indirect costs

Competitive Neutral Charge (CNC)

Factoring in the exact cost of institutional services to an individual research project would be resource intensive. Therefore Curtin employs a competitive neutral charge (CNC)  that is applied across the board – the CNC for laboratory based research is 50% on full salary costs (i.e. salary plus salary on-costs) and for non-laboratory based research is 35% on full salary costs.

The indirect costs are not a tax, levy or ‘cut’ being taken from the research project. The CNC is literally the recovery of costs which the University is bearing to support the research project and therefore these costs should be recovered wherever possible.

Funding received from grants on the Australian Competitive Grants Register are exempt from all CNC. Note: it is insufficient for the grant to be a competitive, peer reviewed grant to be eligible for the exemption of CNC, it must be on the Register.