Budget and related financial information

Financial planning is an important part of EU proposals. What you write in your proposal sets the boundaries for what you can do if your proposed project is funded. Your project must also comply with rules and laws set by the European Commission, by Sweden, and by Karolinska Institutet (KI), making financial planning complex.

We recommend that you plan your budget in conjunction with your department's financial administrators and with Grants Office. Grants Office can provide you with budget templates and with the latest rules and recommendations from the EU.

The information below is based on Horizon Europe's "Rules for Participation" and "Model Grant Agreement".

Funding thresholds and funding limits

In Horizon Europe, the size of the total budget is usually suggested in the call text, but that does not preclude submission and selection of proposals requesting other amounts.

The suggested budgets for Research and innovation actions (RIA) most frequently range between 2 and 6 million Euro, but a few larger scale projects --10-20 million Euro -- are also envisaged for certain calls. The project types Innovation actions (IA) and Coordination and Support actions (CSA) typically have budget suggestions ranging from 1 to 3 million Euro. Typically, an RIA has a duration of 3-5 years, an IA 2-3 years, and a CSA 1-2 years.

Eligible and ineligible costs

In standard research and development projects you can usually receive funding for up to 100% of your eligible costs. In practice, however, all EU projects will have costs that are ineligible or in other ways fail to meet the criteria for eligible costs. Therefore, all EU-funded projects need to be co-financed to some extent (10 % on top of eligible costs is a good estimate). 

As a general rule, all costs necessary for the implementation of the project are considered eligible costs (excluding the ineligible costs listed below), e.g., costs for personnel, travel, consumables, equipment, etc.

To be eligible, costs must be:

  • Incurred by the beneficiary, during the duration of the project
  • Determined in accordance with the normal accounting principles of the beneficiary
  • Used for the sole purpose of achieving the objectives of the project
  • Recorded in the accounts of the beneficiary
  • Indicated in the overall budget in Annex I (the application)

Costs such as indirect taxes (including VAT), duties, interest, exchange losses, and dept charges are considered ineligible. For a complete list of ineligible costs, see Article 6 of the Terms and Conditions of the Grant Agreement. An exception to this rule is non-deductible VAT (e.g. VAT on travel bills), which is considered an eligible cost.

Direct and indirect costs

Direct costs are those eligible costs that relate directly to the project. They must also be identified by the beneficiary as directly related to the project, in accordance with its normal accounting principles and internal rules. With regard to personnel costs, only the costs of the actual hours worked by the persons directly carrying out work under the project count as direct costs.

Indirect costs are those eligible costs that cannot be identified by the beneficiary as being directly related to the project. They must be identified and justified by the beneficiary's accounting system as being incurred in direct relationship to the eligible direct costs related to the project. They may not include any eligible direct costs.

In Horizon Europe, only one flat rate (25%) for compensation of indirect costs is applied to collaborative projects. In other actions (e.g., Marie Skłodowska-Curie and ERC), the reimbursement of indirect costs may be lower. Please note that this does not vary on a project or partner basis: the same rate will apply for all partners in the same project.

EU projects at Karolinska Institutet

Below you will find important information regarding EU-funded projects at KI. Please read this information when planning your budget.

Purchase and public procurement

The European Commission has made it very clear that they will perform audits to ensure that the purchase and public-procurement rules are followed within the projects. To be eligible, your purchase must be made according to KI's internal purchase and public-procurement rules. You must also show that the principle of "best-value-for-money" has been followed, regardless of the amount involved. During the Ernest and Young audit, documentation confirming compliance with the "best-value-for-money" principle will be reviewed.

Internal invoices at Karolinska Institutet

The Horizon Europe rule book has its limitations when it comes to internal purchases made within an organisation. For internal purchases to be eligible, the internal facilities from which the services are purchased must have auditable documentation, including log books for their equipment. Currently, most KI and KI-SciLifeLab facilities lack this type of documentation, which means that the costs for many of the core facilities are deemed ineligible. SciLifeLab facilities at Uppsala University, Stockholm University and the Royal Institute of Technology are considered external facilities; therefore, costs incurred at these facilities are eligible costs that are classed as subcontracting costs.

Scholarships and stipends

Stipends cannot be charged to Horizon Europe-funded projects because they are considered to be for educational purposes (training costs are ineligible in Horizon Europe). KI pays stipends and scholarships only for education (i.e., taxes and social fees are not applied to these).

Equipment

If you plan to buy equipment during your Horizon Europe-funded project, make sure you state as much in your proposal. KI´s internal purchase and public-procurement rules must be followed, and depreciations must be calculated according to KI´s rule book. Log books are required as verification for the use of the equipment in the project: It is only the time that the equipment is used specifically for the project that can be charged to the project.

Personnel costs

The rules on how to calculate personnel costs in Horizon Europe differ from both H2020 and FP7. The costs are based on actual annual personnel costs for the person, divided by a fixed number of days (215). This gives you a “daily rate” that will be applied to all personnel costs related to that person during the actual calendar year (Jan-Dec). In H2020 projects, the personnel cost calculations often resulted in a need for co-financing. That will most certainly be the case in Horizon Europe as well. Please bear this in mind when you are planning the budget in your proposal!

Region Stockholm in EU-projects

Many clinical researchers are employed at both KI and Region Stockholm, which means that they can apply with both organisations in EU-projects. As a rule of thumb, make sure you apply with the organisation where your costs arise. There are very limited possibilities to invoice between the two organisations. Invoicing related to the PI’s salary, is not possible in EU-projects. In these cases (if the salary cost and the project costs do not arise within the same organisation) both organisations must be partners in the proposal.

Please always contact Grants Office if you plan to incur costs at both KI and Region Stockholm.

Budget templates

To help you plan your budget, KI's Grants Office provides you with templates and information (KI-login required).

More information for logged in staff

There is more information for those of you working in the following groups

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