De Minimis Rate Eligibility Requirements

2 CFR 200 (OMB Super Circular)

Non-Profit and Non-Federal entities that have never received a negotiated indirect cost rate and will receive less than $35 million in direct Federal funding per year, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) by executing the Certification of Indirect Costs link provided below.

200.68 Modified Total Direct cost (MTDC)

MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and sub-awards and sub-contracts up to the first $25,000 of each sub-award or sub-contract (regardless of the period of performance of the sub-awards and sub-contracts under the award).

MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each sub-award and sub-contract in excess of $25,000.

Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

200.403 Factors affecting allowability of costs

Costs must meet the following general criteria in order to be allowable under Federal awards:

(a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.

(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.

(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.

(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstance has been allocated to the Federal award as an indirect cost.

(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.

(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.

(g) Be adequately documented. (See 200.300 Statutory and national policy requirements through 200.309 Period of performance of this part).


  1. Financial Statement documentation to support the methodology (200.403) used to determine the MTDC (200.68). 
  2. 10% Federal De Minimis Indirect Cost Rate Certification of Indirect Costs