De Minimis Indirect Cost Rate: 10% vs. 15%, Who Can Use It, and How to Calculate It
Negotiating an indirect cost rate takes time and documentation that small and first-time recipients often do not have. The de minimis rate lets them recover some overhead without a negotiation.
The rate changed in 2024 and changed back for NIH in 2026, so the right figure depends on who is funding the award.
Which rate applies
| Award | De minimis rate | Base |
|---|---|---|
| NIH awards (since NOT-OD-26-072, April 2026) | 10% | Modified total direct costs, with the first $25,000 of each subaward |
| Other federal awards under the 2024 Uniform Guidance | Up to 15% | Modified total direct costs, with the first $50,000 of each subaward |
Some award types set their own fixed rates instead, such as NIH training and career development awards. Check the funding opportunity.
Who can use it
- Recipients and subrecipients that do not have a current federally negotiated indirect cost rate, including a provisional rate.
- Organizations that have never negotiated a rate, such as small nonprofits, community organizations, and new research institutes.
- Subrecipients on a prime award: a pass-through entity must accept a subrecipient's choice of the de minimis rate.
- Not institutions with a current NICRA. Universities with a negotiated rate use that rate.
How to calculate it
Multiply the rate by the project's modified total direct costs. On a budget with $200,000 in MTDC, the de minimis rate yields $20,000 at 10% or $30,000 at 15%.
Because the base is MTDC, equipment, tuition remission, participant support, rental costs, and the portion of each subaward above the threshold are left out before you apply the rate.
De minimis vs. a negotiated rate
| De minimis rate | Negotiated rate (NICRA) | |
|---|---|---|
| Rate | Fixed: 10% (NIH) or up to 15% (2024 Uniform Guidance) | Based on the organization's actual indirect costs, often much higher for research institutions |
| Documentation | No cost justification required | Indirect cost proposal reviewed by the cognizant agency |
| Duration | Can be used indefinitely, until you negotiate a rate | Fixed periods set in the agreement |
| Best for | Small or new recipients with modest overhead | Organizations whose real indirect costs exceed the de minimis rate |
Rules to follow once you elect it
- Apply it consistently to all of your federal awards until you negotiate a rate.
- Do not also charge the same types of costs directly. Costs covered by the rate cannot be double charged.
- Keep the election on file and note it in each budget justification.
- If you later negotiate a rate, new awards use the negotiated rate from its effective date.
Common pitfalls
- Budgeting 15% on an NIH award. NIH rescinded the 15% rate in April 2026.
- Applying the rate to total direct costs instead of MTDC.
- Charging overhead-type costs directly while also claiming the de minimis rate.
If you have no negotiated rate, you can recover overhead at a flat rate on MTDC: 10% for NIH awards today, up to 15% for other agencies under the 2024 Uniform Guidance.
Frequently asked questions
What is the de minimis indirect cost rate?
A flat rate an organization without a negotiated indirect cost rate can use to recover overhead, applied to modified total direct costs.
Is the de minimis rate 10% or 15%?
Up to 15% of MTDC under the 2024 Uniform Guidance, which applies to most federal agencies. NIH rescinded that change in April 2026, so NIH awards use 10% of MTDC.
Who can use the de minimis rate?
Any recipient or subrecipient that does not have a current federally negotiated indirect cost rate, including a provisional rate.
Does a pass-through entity have to accept the de minimis rate?
Yes. A pass-through entity must accept a subrecipient's election of the de minimis rate rather than forcing a lower rate.
How long can the de minimis rate be used?
Indefinitely, until the organization chooses to negotiate a rate. It must be applied consistently to all federal awards while in use.
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