When calculating indirect costs in a proposal budget, it is important to consider both the indirect cost rate and the indirect cost base.
The Modified Total Direct Cost (MTDC) base, which is used for the University’s federally negotiated indirect base, excludes certain costs from the direct cost total including:
For a complete list of excluded subcodes for Pitt’s standard MTDC base, please view the most recent CFO memo.
The Total Direct Cost (TDC) base includes all direct costs without exclusions.
TDC Example: If a sponsor requires 10% TDC indirect cost rate and the direct costs total is $100,000, then the indirect costs would be calculated as: $100,000 x 0.10 = $10,000. The total costs of the project would be $100,000 + $10,000 = $110,000.
MTDC Example: If a sponsor requires 10% MTDC indirect cost rate, excluding capital equipment, and you have budgeted $10,000 for equipment, the direct cost base would be calculated as: $100,000 (total direct costs) - $10,000 (equipment) = $90,000. Then, you would apply the 10% IDC rate to the $90,000 to get $90,000 x 0.10 = $9,000. The total costs of the project would be $100,000 (direct costs) + $9,000 (indirect costs) = $109,000.
If a sponsor requires the use of an IDC rate that is less than the university’s negotiated rate, please ensure the correct base is reflected in the MyFunding budget. If a sponsor does not specify whether a base is MTDC or TDC, use TDC.