The cost of staff assigned to the Action, corresponding to actual
gross salaries including social security charges and other
remuneration-related costs; salaries and costs shall not exceed those
normally borne by the Beneficiary(ies), unless it is justified by
showing that it is essential to carry out the Action;
- Staff costs are eligible provided that
the staff are essential to the implementation of the Action and are
explicitly mentioned in the project proposal.
- The eligible costs are constituted by gross salaries or wages in respect of the actual time devoted to the project and include income taxes, social security etc., and other statutory costs included in the remuneration, provided they are standard Human Resources policy of the Beneficiary and can be proved by supporting documents of the Beneficiary (or Affiliated Entity). For example, medical insurance, repatriation, relocation, visa costs, housing allowance, salary adjustments, other benefits etc. may only be eligible if they respect all applicable legislation, constitute a standard practice of the organization and are actually paid.
- As a
general rule "Provisions" in the Beneficiary's accounting cannot be
considered as actual costs, but some exceptions can be agreed on a
case-by-case basis where they constitute an obligation under applicable
law and a certain future disbursement. (refer to Art. 14.1 a) ii) for
the requirement of costs not yet paid at the submission of the final
report)
- They should be traceable to supporting
schedules (number and names of staff, part-time / full time indication),
to payroll records (e.g. salary slips), and to Human Resources records
(e.g. employment contracts). NB: A
pro-rata system based on estimations cannot be used to justify direct
costs, since such a system would not represent real cost (but only
estimation). For example it may be accepted that a country director
works 20% on a contract if supported by timesheets, justifying that he
actually worked those hours or days on this project. The time worked and
the costs linked to it represent closely the reality. However, it
cannot be accepted that a country director's working time is divided
equally on a pro-rata basis on 5 different projects, based on the
assumption that he spends equal time on all projects - because such an
assumption does not necessarily reflect reality. Refer to Art. 14.7 for more information on “Shared costs”.
HQ staff
As a general rule, costs of HQ staff should be covered by indirect costs.
However,
with due consideration to the description and the functional
organisation of the Action and of the Beneficiary(ies), they may be
charged as direct costs in the following circumstances:
-
They relate to the achievement of the Action's operational results and
have accordingly been identified as an operational activity in the
description of the Action.
- They cover the actual presence of HQ
staff in the field (e.g. specific monitoring missions, needs assessment,
etc). This means that a simple % is not acceptable, a specific pro-rata
related to the actual days/months of mission in the field has to be
demonstrated.
They must be well justified in the framework of the Action and accepted by the Contracting Authority.
In
all other cases, the related HQ staff costs cannot be charged to the
Action as direct costs either in whole or on a pro rata basis,
calculated for instance on the basis of the time the HQ staff spent on
the concerned activities.
Consultants (v. Employees)
As
a general rule, tasks performed by consultants, experts and/or other
service providers (e.g. accountants, lawyers, translators, external IT
staff, etc…) are to be considered as resulting from implementation
contracts (Art.10 General Conditions). Consequently, Beneficiaries of
grants must award the contract to the tender offering best value for
money, that is to say, to the tender offering the best price/quality
ratio, while taking care to avoid any conflict of interests, i.e. in
accordance with Annex IV.
These costs are
thus not considered as human resources (budget heading 1) but as other
costs/services (notably budget heading 5 or 6)
Specific case: "in-house consultants":
In
house/”intra muros” consultants are natural persons working on the
basis of a service contract as opposed to employees hired on the basis
of a labour contract. They join the Beneficiary's(ies') project team and
deliver 'external services'. The costs arising from these in-house
consultants are in principle to be considered as costs relevant to
implementing contracts.
However, as an
exception to the rule, these costs may be considered as personnel costs
regardless of whether the consultants are self-employed or employed by a
third party, if the following cumulative conditions are fulfilled in
accordance with the terms of the call for proposals and subject to the
eligibility of costs:
(a) the Beneficiary(ies) has a contract
to engage the consultant to work for it and (some of) that work involves
tasks to be carried out under the project funded by the grant;
(b) the consultant must work under the instructions/supervision of the Beneficiary(ies);
(c) the consultant must work in the premises of the Beneficiary(ies) as a member of the project team;
(d) the output of the work belongs to the Beneficiary(ies);
(e) the costs of employing the
consultant are reasonable, are in accordance with the normal practices
of the Beneficiary(ies) and are not significantly different from the
personnel costs of employees of the same category working under a labour
law contract for the Beneficiary(ies);
(f)
travel and subsistence costs related to such consultants' participation
in project meetings or other travel relating to the project is directly
paid by the Beneficiary or in any case according to the Beneficiary's
own staff procedures.
(g) the consultant uses the Beneficiary's(ies) infrastructure (i.e. user of the 'indirect costs').
These conditions describe a de facto situation of subordination, as in a traditional labour contract (regardless of the legal form). Therefore in these cases, if the national applicable legislation allows for a de facto employee to be hired under a service contract, and provided that all the conditions stated above (similar costs, property of results, subordination, etc ) are satisfied, these service contract may be assimilated to staff costs in the budget and for all useful purposes (for instance procurement rules set out in Annex IV would not apply).
This is to be evaluated by the
Contracting Authority on a case by case basis, so it is strongly
suggested to discuss it as soon as possible with the Contracting
Authority to avoid any problems.
Note
also that if these conditions are not met, a service contract may still
be awarded through the applicable procurement procedures.
Unless
otherwise specified in the Guidelines for Applicants, service contracts
meeting these criteria may be charged to heading 1.Human Resources.
Payroll for nonprofits is a complex issue. Certain rules and
exceptions apply that are different than what applies to for-profit
payrolls. As if that complication isn’t bad enough, many nonprofits
seem bound and determined to create their own rules and exceptions that
are categorically incorrect.
In addition to those things, other considerations should be made to focus on two big issues: 1) payroll classification and, 2) types of payments.
Payroll classification. This is a biggie…and it gets asked about by clients on a weekly basis. That is, “Should I pay my staffers as employees or independent contractors?” 95% of the time, the answer is employee,
regardless of any other extraneous information that gets tossed into
the mix. It is a widely-held belief that an employer has the choice
under which status to pay its workers. The most common justification is
the savings the NPO will experience if it doesn’t have to cover payroll
taxes. The problem is, it’s not your choice. Even if your staffer
agrees to be treated as a contractor, it is still contrary to IRS and
state regs. The IRS, in determining whether or not a worker is a
contractor or employee, looks at several factors. They are:
- Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
- Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
- Type of relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Type of payment. By type of payment, we mean things like straight salary or wages versus bonuses and commission. The IRS calls the latter non-linear compensation…and
it isn’t too fond of it in a 501(c)(3) setting. For-profit
organizations can do this all day long. But for nonprofits, the IRS
considers this an open door to unreasonable compensation. For example,
Charity, Inc. hires two employees who will be in charge of managing
fundraisers. They will be paid a small base salary, plus a percentage
of the money raised at the event. Sounds reasonable, but the IRS says,
“No…not reasonable!” Employees should be paid according to the job
description of the position. Not only is non-linear compensation
usually unreasonable by IRS standards, it also opens the door to
potential fraud, or at least improper conduct, as the employees have
everything to gain by pushing the limits on fundraising.
Real Story and answer:
I would be interested in creating with some colleagues a FET Young Explorers
project, in which I would be Work Package leader.
I've been involved in several european projects, but always as a postdoc
recruited by a PI (or WP leader), and I don't have a permanent position
yet. So basically, the idea of applying to this project would be to get
my full salary paid by the EU project, but I don't know if it's
possible.
Indeed, in the FAQ, they say that the applicants need to have a position somewhere. I don't think getting a position would be a problem, but only if I come with my own salary. The question in this case is whether the hosting institution still needs to pay some part of my salary?
EDIT: A precision on the question. From the Guide for Applicants, Section A3/Budget, p. 47, the part about the requested European Commission contribution:
But I think the other thing is that most likely a temporary worker can get a full-time salary from an EU-level grant, but a permanent employee cannot.
Indeed, in the FAQ, they say that the applicants need to have a position somewhere. I don't think getting a position would be a problem, but only if I come with my own salary. The question in this case is whether the hosting institution still needs to pay some part of my salary?
EDIT: A precision on the question. From the Guide for Applicants, Section A3/Budget, p. 47, the part about the requested European Commission contribution:
The requested EC contribution shall be determined by applying the upper funding limits indicated below, per activity and per participant to the costs accepted by the Commission, or to the flat rates or lump sums. Maximum reimbursement rates of eligible costsSo, if the salary of a researcher is included in the Research and Technological development, then does that mean that it's possible to only ask for 75% of it to the EC? (assuming the researcher is employed by a university).
(*) For participants that are non profit public bodies, secondary and higher education establishments, research organisations and SMEs.
- Research and technological development = 50% or 75%*
- Demonstration activities = 50%
- Other activities (including management) = 100%
But I think the other thing is that most likely a temporary worker can get a full-time salary from an EU-level grant, but a permanent employee cannot.
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