Field notes
When overhead percentages invite funder queries
Flat overhead mark-ups are easy to type and hard to defend. Here is how we ask clients to document them.
A single overhead percentage applied across every direct cost looks tidy in a spreadsheet. Reviewers, however, often ask which expenses sit inside that percentage and whether the same costs appear again as direct lines.
We prefer a short overhead note: the cost pool, the allocation base (for example, direct labour hours), and the calculation that produced the rate. If the funder caps overheads, show the capped figure and the uncapped figure side by side so nobody confuses the two.
If your organisation has never calculated an overhead rate formally, do not invent one for the annex. Claim only the indirect costs you can name and support, or ask the funder which simplified method they accept.