SBIR Indirect Cost Rate Calculator

How SBIR indirect cost rates work

The three options

Every SBIR Phase I applicant has to choose one of three indirect cost approaches. The right answer depends on whether your small business has ever been audited by a federal cognizant agency (DCAA, ONR, NIH DFAS, etc.).

• De minimis (up to 15% of MTDC): Available under 2 CFR 200.414(f) to recipients without a current federal negotiated indirect cost rate. It needs no documentation to justify and is applied to Modified Total Direct Costs, which exclude equipment, capital expenditures, rental costs, participant support costs and the portion of each subaward over $50,000. It does not apply to cost-reimbursement contracts issued directly under the FAR.
• Negotiated NICRA (Negotiated Indirect Cost Rate Agreement): If you have an active rate agreement with a federal cognizant agency, use that rate. Typically 20–60% depending on whether it's a fringe-only, overhead, or full F&A rate. Required if you have one on file.
• Provisional / proposed rate: For applicants requesting a rate higher than the 15% de minimis but who don't yet have a NICRA. Requires documentation of your indirect cost pool and base methodology. Subject to audit.

Agency-specific caps

Every figure below was checked against the agency's own solicitation or program page on 2026-09-24. Where no single figure could be verified, the calculator shows no cap and links to the solicitation instead.

• SBA guideline (all agencies): As of April 2026, agencies may issue a Phase I award up to $323,090 without seeking SBA approval. Anything above that needs an SBA waiver, so it is a guideline, not a hard cap.
• NIH: Under the parent SBIR announcement (PA-27-100), total funding (direct costs, indirect costs and fee) normally may not exceed the SBA guideline of $323,090. It is not a hard cap: several institutes list higher Phase I limits in that announcement, and approved waiver topics can go higher still.
• NSF: Under NSF 26-510, Phase I proposals may request up to $305,000, inclusive of direct and indirect costs, the small business fee, TABA and I-Corps. The fee is up to 7% of total direct + indirect costs, so the maximum forces a back-calculation (see below).
• DOD: There is no single DOD figure. Phase I limits are set per component and per topic in the 2026 DoD SBIR BAA, so check the topic you are proposing to.
• DOE: The FY26 Phase I Genesis Mission opportunity says total funding requested should not exceed $250,000, or $256,500 with a TABA request. DOE says a broader Phase I opportunity is expected later this fall, which may set a different figure.
• USDA NIFA: No USDA NIFA Phase I solicitation was open on Grants.gov on 2026-09-24 (the most recent closed in September 2024), so the calculator shows no cap. Check NIFA's SBIR/STTR page for the next one.

The 7% fee back-calculation problem

NSF calculates the Phase I small business fee as up to 7% of total direct + indirect costs, and its $305,000 Phase I maximum includes that fee. When your total budget must equal exactly $305,000, the math runs backwards:

Direct + Indirect + (Direct + Indirect) × 0.07 = $305,000
(Direct + Indirect) × 1.07 = $305,000
Direct + Indirect = $285,046.73
Fee = $19,953.27

The calculator above runs this automatically given your direct cost number and indirect rate, so you don't have to algebra your way to the cap.

Fringe rates: small business vs. university

Small business fringe rates (employer payroll taxes + benefits) typically run 18–35% of direct labor. Universities and research institutions average 30–40%. For STTR proposals, you'll need your subcontractor research institution's fringe rate separately: the small business 40% / research institution 30% cost split rule means the two budgets are computed independently.

Common mistakes to avoid

• Applying indirect to total direct (TDC) instead of MTDC: The de minimis rate (up to 15%) applies to modified total direct costs. Equipment ($10,000 or more per unit, or your lower capitalization level), capital expenditures, tuition remission, and the portion of each subaward over $50,000 are excluded from the base (2 CFR 200.1).
• Forgetting the fee in the cap math: NSF's $305,000 Phase I maximum includes the fee. Budget direct + indirect to $285,046.73 and let the 7% fee fill to the maximum.
• Using a provisional rate above 35% without justification: If you don't have a NICRA, rates above ~25–35% will trigger pre-award audit requirements that can delay your start date by 60–120 days.
• STTR cost split errors: STTR requires the small business perform at least 40% of the work and the research institution perform at least 30%. Indirect rates are computed on each entity's piece separately.

Source documents

• SBIR.gov: Accounting & Finance Tutorial 3: Indirect Rates
• 2 CFR 200.414(f): de minimis rate of up to 15% of MTDC
• 2 CFR 200.1: definitions of MTDC and equipment
• NSF 26-510 Program Solicitation
• NSF SBIR/STTR Budget Preparation Instructions
• SBIR.gov: About SBIR and STTR (SBA award-size guideline)
• NIH PA-27-100: Parent SBIR announcement, Award Budget
• DoD 2026 SBIR BAA instructions
• DOE FY26 Phase I Genesis Mission opportunity
• USDA NIFA SBIR/STTR program
• NIAID: Know Your Actual SBIR Budget Cap
• NIH G.300: R&R Budget Form Instructions

This tool is a planning aid, not financial or legal advice. Verify all rates and caps with your cognizant federal agency and Authorized Organizational Representative before submission.