The Real Math: Why IDC Rates Are Actually Lower Than They Appear
At UC Berkeley, a 60.5% indirect cost (IDC) rate does not mean $60.50 is added to - or deducted - from every $100 of a sponsored research project's total cost. Like taxable income, certain expenses are removed before the rate is applied. In university accounting, this adjusted base is called Modified Total Direct Costs (MTDC).
Modified Total Direct Costs
MTDC excludes certain major project expenses such as capital equipment, tuition remission, off-site facility rentals, scholarships, and the portion of...