Q: What happens when I change the budget variables?
Mar 8, 2013 35192 Print this page Download PDF Request support
Here is the basic formula to have in mind for staff cost:
Personnel cost rate / by partner / by year / DoW > Contractor > Financial Information/ 12 *
Number of person months / by partner / by Task / DoW > Work plan > Staff effort
Indirect Cost / by partner / DoW > Contractor > Financial Information
= Total budget *
EC Contribution rate / by activity type / by Type of Organization / DoW > Contractor > Contractor’s Information
= Max EC contribution
Scenario A: Changing Personnel cost rate of a partner
Company A is an SME with a EUR120,000 yearly personnel cost rate and the transitional flat rate overhead (60%) and has 10 person months from M1 to M10 in a research activity. This means the total budget will be (EUR120,000/12 + EUR120,000 * 60%) * 10 person months = EUR160,000 and the max. EC contribution * 75% for RTD = EUR120,000
Company A changes the 10 person months to a junior level employee whose yearly personnel cost rate is EUR50,000. This means the total budget will be (EUR50,000/12 + EUR50,000 * 60%) * 10 person months = EUR66,667 and the max. EC contribution * 75% for RTD = EUR50,000.
Note: The total budget and EC contribution change proportionally to indirect cost changes (42%).
Scenario B: Changing the Indirect Cost calculation of a partner
Company A is an SME with a EUR120,000 yearly personnel cost rate and the transitional flat rate overhead (60%) and has 10 person months from M1 to M10 in a research activity. This means the total budget will be (EUR120,000/12 + EUR120,000 * 60%) * 10 person months = EUR160,000 and the max. EC contribution * 75% for RTD = EUR120,000.
Company A changes its indirect cost calculation to actual indirect cost rate of 85%. This means the total budget will be (EUR120,000/12 + EUR120,000 * 85%) * 10 person months = EUR185,000 and the max. EC contribution * 75% for RTD = EUR138,750.
Note: The EC Contribution and total budget change at the same % (16%) but not proportionally to the indirect cost rate change (42%).
Scenario C: Changing the Type of organisation of a partner
Company A is an SME with a EUR120,000 yearly personnel cost rate and the transitional flat rate overhead (60%) and has 10 person months from M1 to M10 in a research activity. This means the total budget will be (EUR120,000/12 + EUR120,000 * 60%) * 10 person months = EUR160,000 and the max. EC contribution * 75% for RTD = EUR120,000.
Company A transforms into a large enterprise with a EUR120,000 yearly personnel cost rate and the actual indirect cost rate of 60% and has 10 person months from M1 to M10 in a research activity. This means the total budget will be (EUR120,000/12 + EUR120,000 * 60%) * 10 person months = EUR160,000 but the max. EC contribution * 50% for RTD = EUR80,000.
Note: The total budget remains the same but the EC contribution changes proportionally to the reduction in reimbursement (33%).
Scenario D: Changing the partner
Company A is an SME with a EUR120,000 yearly personnel cost rate and the transitional flat rate overhead (60%) and has 10 person months from M1 to M10 in a research activity. This means the total budget will be (EUR120,000/12 + EUR120,000 * 60%) * 10 person months = EUR160,000 and the max. EC contribution * 75% for RTD = EUR120,000.
Company B is a large company with a EUR150,000 yearly personnel cost rate and the Standard Flat Rate (20%) and has 10 person months in a research activity. This means the total budget will be (EUR150,000/12 + EUR150,000 * 20%) * 10 person months = EUR150,000 and the max. EC contribution * 50% for RTD = EUR75,000.