A NICRA is an agreement between an organisation and a US federal agency on the indirect cost rate that may be charged to grants. An organisation without such an agreement may apply the standard de minimis rate, which since 2024 stands at 15% rather than 10%.
- De minimis
- 15% (was 10%)
- Applies to awards
- From 01.10.2024
- Subaward base
- First $50,000
- From 2025
- Lower rate = advantage
Indirect costs are those that cannot be attributed to a specific project: accounting, office rent, management. A NICRA fixes the percentage of direct costs you may charge to a grant to cover them.
Negotiation is with your cognizant agency – the one providing the largest volume of direct federal funding.
De minimis is 15%, not 10%
This is the most common stale figure in circulation. The standard rate for those without a negotiated agreement was raised from 10% to 15% by the 2024 revision, applying to awards from 1 October 2024.
The base changed too: it now includes the first $50,000 of each subaward, up from $25,000.
Who may use it: any recipient or subrecipient without a current negotiated federal rate. The 2024 revision removed the old restriction on entities that once held a NICRA. But having chosen it, you must apply it to all federal awards until you move to a negotiated rate.
Four types of rate
Provisional – temporary, for funding and interim reimbursement until a final rate is set. Final – based on actual costs of a past period, not subject to adjustment. Predetermined – for a current or future period based on estimates, not revised. Fixed with carry-forward – like predetermined, but the difference between estimate and actual is carried into the next period's calculation.
A rate proposal is submitted within six months of the end of the fiscal year.
A high rate has become a competitive disadvantage
A 2025 change worth knowing separately. An executive order of 7 August 2025 introduced a preference for applicants with a lower indirect cost rate, and it is already operating: State Department documentation for 2026 names the lower rate explicitly as a tie-breaker.
So a NICRA is no longer purely an accounting document – it is a competitiveness factor.
Status in 2026
The proposed reform of federal rules published in May 2026 deliberately leaves the indirect cost system alone. So 15% stands at least until a separate decision. Cognizance over former USAID partners passed to the State Department.
Frequently asked questions
Which rate do we use if we do not have a NICRA?
The de minimis rate, 15% of the modified total direct cost base. It is not 10%: the rate was raised by the 2024 revision of the rules, for awards made from 1 October 2024. It has to be applied to all federal awards.
Is it worth negotiating a high rate?
Since 2025, not necessarily. An executive order introduced a preference for applicants with a lower indirect cost rate, and this is already being used as a tie-breaker when results are equal. A high rate can now cost you the award.
The prime organisation is requiring us to apply de minimis. Is that lawful?
No, not if you have a negotiated federal rate. The rule expressly prohibits a pass-through entity from requiring de minimis from a subrecipient that has its own negotiated rate.
Official materials
Sources
- 2 CFR 200.414 and Appendix IV ecfr.gov · checked 27.07.2026
Data current as of 27.07.2026. Verify the terms with the donor’s official portal before applying.
Updated 27.07.2026 · Reviewed by: GetGrant editorial team
