How UKRI full economic costing works

The short answer

Full economic cost (fEC) is the whole cost of doing your project, including a share of your organisation's buildings and running costs, not only the salaries and consumables you can point to. UKRI asks you to show 100% of that cost in your application and usually funds 80% of it. Your organisation must agree to find the remaining 20% from its own resources.

A small set of costs, called exceptions, are paid at 100% instead. Which costs count as exceptions is set by each funding opportunity.

What full economic costing is

STFC describes full economic costing as a way to get consistent and transparent research project costs: it should find the real cost of your research and inform the amount you request.

Universities and other higher education organisations calculate fEC with TRAC, the Transparent Approach to Costing. Other research organisations can use default dispensation rates or their own methodology once UKRI has validated it. Independent research organisations and NHS trusts may not need to follow TRAC, so check with your organisation.

Cost everything at current prices, with no allowance for inflation. STFC notes that an allowance for inflation may be added if the grant is awarded.

The four cost headings

Every cost in a UKRI application sits under one of four fund headings, and each cost should go under only one of them.

The headings and rates are from MRC's application and policy guide and STFC's fund headings page. MRC's guide gives examples of exceptions: costs for international collaborating organisations, public partnership costs, some DNA sequencing, scheme-specific costs and externally contracted social surveys.

Equipment

For funding opportunities launched in the UKRI Funding Service from 1 April 2025, UKRI funds all equipment at 80% of fEC. The limited exceptions funded at 100% are specific equipment or infrastructure opportunities, international partner costs for countries on the OECD Development Assistance Committee list, and instrument development awards.

A single item costing £25,000 or more is capital equipment and goes under the equipment heading, with a justification. Items under £25,000 go under directly incurred: other. Opportunities published before 1 April 2025 keep the previous £10,000 threshold.

Estates and indirect costs

Estates cover a share of the physical infrastructure for research: buildings and premises, basic services and utilities, and clerical staff and equipment maintenance not included elsewhere. All estates costs are directly allocated. Indirect costs cover your organisation's administration and shared services.

You do not work these out yourself. Your research organisation calculates both from its own TRAC rates, so they vary between organisations, and each goes into the application as a single figure for the project. They do not need to be justified, and MRC says it will not question them, though it takes the full cost into account when judging value for money.

• If UKRI awards a different level of staff effort from the one you asked for, your organisation must recalculate the estates and indirect costs on the same costing basis and TRAC rates. MRC gives it ten working days.
• Where someone will be on secondment away from the organisation for more than six months in total during the project, estates are not charged for the secondment.
• Your organisation must make sure no more than 100% of anyone's FTE is claimed as indirect costs, or as estates, across all UKRI grants.

Dispensation rates

A university with little publicly funded research income does not have to run TRAC in full. A higher education provider is eligible for dispensation when its publicly funded income is under £3 million a year, as a five-year rolling average. Claiming it is the institution's decision, and an eligible institution can still comply fully and calculate its own rates. One that claims it applies the lower of its own charge-out rate and the dispensation rate, for indirect costs and for estates, on research council and other government department projects.

Non-university organisations whose costing methodology the research councils have not yet validated also apply the dispensation default rates, for indirect costs and for laboratory and non-laboratory estates. An organisation whose TRAC is not considered robust, and which is not eligible for dispensation, applies the lower of its own and the non-compliant indirect cost rate, and cannot charge estates at all.

UKRI updates the dispensation rates each year and sets them at the sector's lowest quartile. The 2026 to 2027 rates were published on 1 October 2026 and apply until the 2027 to 2028 rates replace them.

Both columns are TRAC rates from 2024 to 2025 data, indexed for two years. Annex 1.2b of the TRAC guidance sets out dispensation in full.

Investigator time

Investigators, project leads and co-leads in UKRI's role names, are costed by time. Their cost is derived from the hours they will spend on the project and a salary rate, which can be an average or pool rate. You justify the time commitment in the application, not the salary. If you plan staff in person-months rather than hours, the person-months guide covers the conversion.

The limits on that time:

• The most UKRI will fund for one person across all its projects is 1,650 hours a year, which is 37.5 hours a week for 44 weeks
• Salary costs for any one person must not exceed 100% of full-time equivalent across all research council grants and fellowships
• If part of someone's salary is already paid by another publicly funded grant or fellowship, do not charge it twice: STFC asks you to show their involvement with zero hours charged
• If an investigator is unpaid, such as emeritus or honorary staff, or is paid wholly from sources outside fEC, show their hours with a zero salary. STFC says their time can still be charged so the estates, infrastructure technician and indirect costs are calculated
• MRC does not fund investigator time for supervising postgraduate students, writing grant applications, peer review or writing publications after the project ends

Your research organisation must have a process that monitors the time claimed, so that no more than 100% of anyone's full-time equivalent is claimed as salary across all UKRI grants.

Allocated or incurred

The same person can be costed under either heading. What decides it is whether their time is an estimate or a record.

• Directly allocated: the cost is based on an estimate of time on the project. STFC expects most project leads and co-leads to go here, because their costs are likely to be estimates.

• Directly incurred: the cost is based on actual time, usually tracked through the project with timesheets. A project lead or co-lead can go here where an audit trail of their time can be provided.

For directly incurred staff who work on two or more projects, timesheets are required. Someone contracted to work 100% of their time on a single project, full or part time, does not need them, because their cost can only belong to that project. BBSRC expects time to be recorded regularly and continuously, and verified at least monthly. MRC says that where timesheets are not kept, the staff belong under directly allocated.

Who pays the other 20%

Your organisation does. MRC's guide puts it plainly: if a grant is awarded, UKRI will typically fund 80% of the fEC, and the applying organisation must agree to find the balance from other resources. Some awards are made at different rates, so check the funding opportunity.

That balance is not the same as matched funding. For new opportunities in the UKRI Funding Service from 1 April 2025, UKRI's default position is that there is no expectation of matched funding, and MRC does not require additional institutional contributions unless the funding opportunity asks for them.

A worked example

An illustrative three-year project. Every figure below is invented and rounded to show the arithmetic; real estates and indirect figures come from your organisation's TRAC rates.

The arithmetic: the £400,000 under the first three headings is paid at 80%, which is £320,000, and the £10,000 of exceptions is paid in full, so UKRI pays £330,000 of a £410,000 fEC. The application shows the full £410,000. On time, a project lead charging 330 hours a year to this grant is using a fifth of the 1,650 hours UKRI will fund across all their projects.

Common mistakes

• Showing only the 80% UKRI will pay, when the application must show 100% of the cost
• Adding inflation to the costings, which should be at current prices
• Assuming equipment is paid in full: since 1 April 2025 it is 80% unless the opportunity is one of the listed exceptions
• Costing an investigator as directly incurred without the audit trail of their time to back it
• Committing one person to more than 1,650 hours a year, or more than 100% of their FTE, once all their grants are added together
• Charging salary that another publicly funded grant already pays
• Treating a cost as an exception because it seems special, when only the funding opportunity can make it one

Where AllocBoard fits

The fEC figure and your TRAC rates come from your research office. What goes wrong over the life of the grants is the staffing behind those figures: one person's time, committed grant by grant, quietly adding up to more than they have. That is the part AllocBoard keeps:

• Each person's allocations are summed across every project, and anyone over 100 percent in a month is highlighted
• Roles such as PI, Co-I or Research Associate carry grade-based pay scales, which AllocBoard uses to calculate salary costs across projects
• Pre-award plans build the bid with salary estimates, work packages and expense forecasts, and carry over to a live project when the grant is awarded
• Budget ceilings can be set against the approved award, and an actual allocation or expense that would take a project over it is refused

Sources

This guide summarises UKRI's and the research councils' own guidance. It is not financial or audit advice: the funding opportunity, your grant's terms and conditions and your research office have the final word.

• UKRI, Find out what costs are eligible for UKRI funding (updated 13 May 2026)

• MRC, Application and policy guide for the UKRI Funding Service, section 4, costs we fund (updated 19 January 2026)

• UKRI, Roles in funding applications: eligibility, responsibilities and costings guidance (updated 20 August 2024)

• UKRI, UKRI updates funding policies to improve research sustainability (21 March 2025)

• STFC, Full economic costing fund headings (updated 18 November 2024)

• STFC, Project lead and project co-leads (updated 8 May 2026)

• STFC, Estates (updated 12 May 2025)

• UKRI, Funding assurance programme: dispensation (updated 1 October 2026)

• STFC, Indirect costs (updated 8 May 2026)

• STFC, Equipment (updated 1 April 2025)

• STFC, Inflation and VAT in your costings (updated 12 May 2025)

• BBSRC, Directly incurred costs (updated 19 February 2026)