Guidelines for drawing up project budgets

Below you will find more detailed information about how to set up the project budget, what the different budget categories include and do not include, as well as requirements for the justifications of costs you include in the budget.

Please note that it is the institution that is entered as the applicant that is responsible for ensuring that all cost estimates, including those prepared by any partners, are within what is allowed, correctly calculated, and adequately justified.

Errors and shortcomings in the project budget may result in HK-dir reducing the grant based on the applicable calculation rules, or an assessment of the reasonableness of the costs. If key activities in the project cannot be carried out as a result of such budget reductions, this could also lead to the project being assessed as incomplete and therefore awarded a lower grade.

Own contribution

If required in the Call for applications, the applicant must also contribute to the funding of the project they wish to carry out. If several institutions/organisations are going to collaborate on the implementation of the project, their own contribution can be divided as desired between the project partners.

When you set up the project budget, the project’s own contribution will automatically be calculated based on the percentage specified under ‘Requirement for own contribution’ in the Call for applications. If you receive a grant, you will be free to choose which of the costs in the project budget to cover through own funds (own contribution) and grant funds. It is therefore not necessary to specify in the application which parts of the project's costs are to be covered through own contribution.

All that is required to meet the own contribution requirement in the application is that the person with legal responsibility at the applicant institution confirms on behalf of the applicant institution that they are familiar with the own contribution requirement and that they will take the necessary steps to ensure that this is met during the implementation of the project. This confirmation is given by uploading a signed version of the HK-dir declaration of participation, cf. specific section under ‘Requirements of the application’ in the Call for applications.

For those who receive grants, fulfilling the own contribution requirement will be one of the factors that HK-dir checks during the project implementation. The use of own contribution funds must therefore be documented and set out in the project accounts.

Budget categories

Grants for projects funded by HK-dir can generally only be used to cover costs that fall within the budget categories listed below and that are calculated in accordance with the rules for the individual budget category. Only some of these budget categories may be allowed in certain calls. The categories that are allowed are listed under the section ‘What can the funds be used for?’ in the Call for applications.

Personnel and administration costs (account category 5***)

This includes costs in the form of salaries to project participants when the intention is for them to have paid release time in order to contribute directly and concretely to the implementation of the project. Calculation of release time costs must be done separately for each project participant who will contribute working time to the project, and for each year of the project.

The first thing that needs to be calculated is the number of full-time equivalent (FTE) hours each participant realistically needs paid release time for in the different project years in order to complete the project’s planned activities.

The number of FTE hours for the applicant’s activities is calculated using the formula: (Total number of days in the year ÷ (Saturdays + Sundays + public holidays not during weekends + number of holiday days according to the Holidays Act + any holidays negotiated through collective agreements beyond those provided for in the Holidays Act)) x the number of working hours per day. For an organisation with one negotiated day off, this will be: (365 days ÷ (52 Saturdays + 51 Sundays + 7 public holidays not during weekends + 25 days holiday + 1 negotiated day off)) x 7.5 hours = 1,718 FTE hours (rounded up to the nearest integer).

Example: A project participant working in a full-time position will contribute during the first and second year of the project and is estimated to contribute a 1/2 FTE in the first year and a 2/3 FTE in the second year. For the first year, the paid release time will be 1,718/2 = 859 working hours, and for the second year, it will be ((1,718/3) x 2) = 1,145 working hours (rounded up).

Example: A project participant working in 50% of a full-time position (part-time position) will contribute to the first year of the project, and the contribution is estimated at 2 months (1/6 of the estimated number of FTE hours). The paid release time will then be 1,718/6 = 286 working hours (rounded up).

When the number of FTE hours that each participant shall contribute during the relevant project years has been calculated, they are then multiplied by the internally calculated average hourly rate that applies to the individual participant’s job category.

The average hourly rates you operate with should include all non-wage labour costs factored into the relevant job category (expenses for holiday pay, insurance, etc.) and the organisation’s usual mark-up for indirect costs (rent, general operating and administrative costs etc.). Average hourly rates cannot exceed NOK 840 (maximum hourly rate).

Example: The project participant in the full-time position in the example above belongs to the position category ‘secondary education teacher with a master's degree (lektor)’, which has an internally calculated average hourly rate of NOK 727 (including non-wage labour and indirect costs). The release time costs for this participant will then be NOK 727 x 844 = NOK 613,588 for the first year and NOK 727 x 1,145= NOK 832,415 for the second year.

Example: A project participant has an internally calculated average hourly rate of NOK 945 (including non-wage labour and indirect costs). As this hourly rate exceeds the maximum limit, an hourly rate of NOK 840 must be used when calculating the release time costs for this participant.

When calculating the costs of releasing participants from organisations other than the applicant organisation, the calculation shall, as far as possible, be done in the same way. The person named as applicant is responsible for ensuring that there is sufficient documentation that the hourly rates applied are correct.

In the budget comments, you must state the number of FTE hours and average hourly rate of all participants, distributed per project year. Where relevant, the exchange rate used when converting hourly rates in foreign currency into Norwegian kroner must also be stated.

Example: In the first year of the project, the participants Hansen, Jensen and Johnsen will contribute 1,300 hours, 840 hours and 350 hours respectively. The average hourly rates for the three are NOK 768, NOK 635 and NOK 840 respectively. In the second year of the project, Hansen, Jensen and Tollefsen will contribute 1,000, 350 and 900 hours respectively. The average hourly rate for Tollefsen is NOK 710.

If the figures stated in the budget/budget comments do not match, we will use the budget figures and the number of hours in our assessment. In case of doubt related to the calculation, we generally recommend consulting the person with financial responsibility for the project.

Procurement costs for services (account category 6***)

Services in this context include all services that an external party will provide to the project, and which do not constitute equipment, cf. below. Many projects will need to procure services from such external parties, e.g., from a consultancy agency, a publisher or a translation company.

There are no restrictions with regard to the services that can be procured for projects, other than that the services must be clearly necessary to carry out the project and achieve its planned results. This means that it must be clear that the service in question would not have been procured if it were not for the project. If there is any doubt as to whether the services meet this necessity requirement, its necessity must be explained in more detail in a comment to the budget.

Unless otherwise stated in the call, various partners may also procure necessary services, whether this takes place in Norway or abroad. In all cases, the applicant institution is responsible for ensuring that the procurement costs stated in the budget are correct.

Only actual costs should be included in the budget. This means that if the institution/organisation carrying out the procurement is exempt from input VAT, then deductions must be made for this tax when the cost is calculated (price excluding VAT). The applicant institution is also responsible for ensuring that any procurements to be made abroad are deducted from deductible taxes (VAT or similar).

Please note that transport services (e.g., air or rail travel) should not be budgeted as procurement of services, see further guidance under ‘Scholarship costs’ and ‘Travel and accommodation costs’. If you are in doubt as to whether something should be considered a procurement of services or equipment, choose what you think is most appropriate and give a brief explanation of your choice in the comments to the budget.

Please also note that the institution that is entered as applicant is responsible for ensuring that procurements from external actors are in accordance with current legal rules in Norway. We specifically mention here the Public Procurement Act (with regulations). If any of the project participants or any of their related parties (cohabitant/spouse/children) have financial interests (directorships, shareholdings, etc.) in any of the external suppliers that are to provide services for the project, these must be explained separately in comments to the budget.

Procurement costs for equipment (account category 4***)

This budget category includes costs associated with obtaining ownership of physical items and acquiring usage rights (licenses, rental rights, etc.) to physical items/software, etc., which you believe are necessary to carry out the project described in the application.

In order to be considered necessary, it must be clear that the equipment in question would not have been procured if it had not been for the project. If there is any doubt as to whether the equipment meets this necessity requirement, its necessity must be explained in more detail in a comment to the budget. You must also choose the most affordable available version of the equipment needed. Costs associated with the procurement/depreciation of equipment acquired before the project's planned start-up are not covered and should therefore not be included in the project budget.

Only actual costs should be included in the budget. This means that if the institution/organisation carrying out the procurement is exempt from input VAT, then deductions must be made for this tax when the cost is calculated (price excluding VAT). The applicant institution is also responsible for ensuring that any procurements to be made abroad are deducted from deductible taxes (VAT or similar).

You also have to calculate the depreciation cost of the equipment. This is done by estimating the total lifespan of the equipment (depreciation period) and dividing the actual procurement cost over this period.

Example: In order to carry out a four-year project, it is considered necessary to purchase video lab equipment, which is estimated to cost NOK 400,000 (VAT deducted). The equipment is estimated to have a total lifespan (depreciation period) of 10 years, which gives a total annual cost of NOK 40,000.

Only the part of the depreciation cost that can be attributed to the period from procurement to the end of the project period shall be included in the budget. Specification of how budgeted depreciation costs are calculated shall be provided in the comments to the budget. For questions related to how depreciation should be calculated, we recommend that you consult the person with financial responsibility for the project.

Example: The video lab equipment mentioned in the example above is planned to be purchased and put into use from the second year of the project onwards and for the remainder of the project period. NOK 40,000 will then be budgeted for the last three years of the project.

Unless otherwise stated in the Call for applications, various partners may also procure necessary equipment, whether this takes place in Norway or abroad. Even for procurements carried out by partners, it is the responsibility of the applicant to ensure that it is necessary and that the budgeted cost is correctly calculated.

The applicant institution is responsible for ensuring that procurements from external actors are in accordance with current legal rules in Norway. We specifically mention here the Public Procurement Act (with regulations). If any of the project participants or any of their related parties (cohabitant/spouse/children) have financial interests (directorships, shareholdings, etc.) in any of the external suppliers who are to provide services for the project, these must be explained separately in comments to the budget.

Scholarship costs (account category 5***)

In projects where student exchanges (bachelor’s, master’s and/or PhD students) are planned to and from Norway, reasonable costs associated with such exchanges may be covered.

For groups of incoming students who are going on exchange stays that last longer than 4 weeks (≥ 28 calendar days), costs related to the students’ subsistence shall be budgeted using the following rates:

• Bachelor’s and master’s students: A grant equal to the applicable basic student loan from the Norwegian State Educational Loan Fund*
• PhD students: A grant equal to the applicable rate for a single research stay abroad under the Research Council of Norway**

*For exchange stays taking place after 31 December in the project start-up year, an additional 3% may be added to the applicable grant rate.

**Grants paid to PhD students may be taxable. Any tax liability must be clarified by the applicant/student with local tax authorities after the student's arrival.

In addition to the scholarship rates, such incoming students will also be able to apply for funding to cover reasonable additional expenses associated with the exchange stay (e.g. travel, visa, and insurance expenses). Such costs shall be calculated and budgeted according to the budget category ‘Travel and accommodation expenses’, cf. further guidance below.

For groups of outgoing students, all costs associated with the exchange shall be calculated and budgeted according to the budget category ‘Travel and accommodation expenses’, cf. below. The same applies to incoming students when the exchange stay is scheduled to last less than 4 weeks (< 28 calendar days).

In the case of a partial virtual exchange, costs related to the period during which the students are on a physical exchange stay are covered in accordance with the corresponding rules as stated above.

Travel and accommodation costs (account category 7***)

This budget category covers travel and accommodation costs for necessary trips to be undertaken by project participants in connection with the project, as well as reasonable costs for exchange students not covered via the scholarship rates mentioned above.

For project participants, it is possible to apply for coverage of expenses for both domestic and international travel, regardless of their job category.

Travel and accommodation costs must be budgeted in accordance with the rates in the State Personnel Handbook (see chapter 9.2 for domestic travel, and chapter 9.3 for international travel). For guidance on these rules, we refer to the Employer portal and Lovdata.

We encourage you to have a clear focus on creating a sensible travel plan for project participants. Digital alternatives should generally be considered and used where appropriate, so that unnecessary travel costs and environmental impacts are avoided. We also encourage other more environmentally friendly transport options (e.g., trains) to be used where possible. Travel that is not sufficiently justified may not be approved when the application is assessed.

For groups of incoming and outgoing students who are going to undertake exchange stays in connection with the project, all reasonable costs directly associated with the exchange stay can be budgeted. This includes:

• travel expenses to/from the place of study in Norway/abroad

Travel expenses to/from countries outside the Nordic region shall be calculated as average travel costs to and from the country of stay (including any costs to/from the international terminal), minus any coverage from the Norwegian State Educational Loan Fund or others. For stays that are going to last longer than 6 months, the estimated average cost can be doubled to account for return travel during the stay.

• living, accommodation and study costs in the host country

For groups of incoming students covered by the scholarship rate coverage, cf. above, and groups of outgoing students who it must be assumed will receive grants for the relevant exchange stay from the Norwegian State Educational Loan Fund, the Research Council of Norway or other Norwegian public authorities, living and accommodation costs in the host country shall not be included under this budget category. However, any special study costs, cf. below, may also be budgeted for such groups.

For any outgoing students who you assume will not receive a grant, the living and accommodation costs must be budgeted using the scholarship rates stated above when the stay is going to last longer than 4 weeks (≥ 28 calendar days). If the planned stay is shorter than 4 weeks (< 28 calendar days), the applicable government rates for subsistence allowance for travel outside Norwayshall be used, in addition to an estimate of reasonable short-term living expenses in the host country.

A supplement for any special study costs (e.g., laboratory-related costs) can be calculated for all groups. School/tuition fees charged by the host institution are not covered.

• visa costs to the UDI or other countries' immigration authorities

For groups of incoming students, the UDI's visa ratesare used. For groups of outgoing students, you will have to find out the visa cost for the group via the official websites of the country in question. In cases where students are most likely to incur travel costs to/from the embassy in their home country/region, estimated costs may also be added to cover such travel. Please also note that different and higher visa rates may apply in the case of internships/fieldwork etc. than in the case of ordinary exchange stays.

• additional insurance costs as a result of the stay

For groups of incoming students who cannot apply for voluntary membership of the Norwegian National Insurance Scheme after arrival, insurance costs shall be calculated at NOK 1,000 per stay. Insurance costs shall not be budgeted for groups of outgoing students who are going to stay in an EEA country (cf. the European Health Insurance Card). For other groups of outgoing students, the price of student insurance for the country of residence in ANSA Student Insuranceshall be used as a basis.

In the case of an internship, you must also estimate the costs of occupational injury insurance, unless this is covered by the recipient company/organisation. The same applies if other specific insurance costs are deemed to be necessary for the group in question.

We emphasise the importance of conducting a thorough review of the costs involved for student groups going on exchange stays, to ensure all covered expenses are included.

For all exchange costs budgeted, you must specify the types of costs and amounts included in the budget. Remember to distinguish between different groups of exchange students in the comments.

Example: The project plans to receive 10 students and send 18 students in one semester, to/from Norway/Japan. In addition, 10 bachelor’s students are to be sent to South Africa for a two-week summer school, in the first and third year of the project, respectively. The comments to this budget item, for example, could be as follows:

1. Semester exchange, 10 incoming master’s students, Japan]: A. Travel to/from Japan/Norway – NOK 12,000 (return Tokyo) + 1,500 (return international terminal); B. Visa costs – NOK 5,900 (UDI fee for study permit); C Insurance, estimated – NOK 1,000 (students can apply for voluntary membership of the National Insurance Scheme after arrival). A total of NOK 20,400 x 10 students = NOK 204,000, in addition to grants as specified under the budget item ‘Scholarship costs’.
2. Semester exchange, 18 outgoing master’s students, Japan]: A. Travel to/from Norway/Japan is covered via travel support from the Norwegian State Educational Loan Fund. Additional costs in addition to the support from the Norwegian State Educational Loan Fund relating to travel per student are estimated at NOK 1,500. B. Visa costs – NOK 215 (student visa, Japan); C. Insurance – NOK 9,065 (based on ANSA's insurance for Japan). Total NOK 10,780 x 18 students = NOK 194,040.
3. Summer school, 2 x 2-week sessions with 10 outgoing bachelor’s students, South Africa]: A. Return travel Norway/ South Africa – NOK 10,000 (the Norwegian State Educational Loan Fund does not cover travel < 4 weeks). B. Living and accommodation costs – NOK 5,000 (accommodation on campus, by agreement with the host institution). C. Visa costs – none for short stay in South Africa). D. Insurance estimated – NOK 119 (based on one-month travel insurance student price in Gjensidige Forsikring). A total of NOK 15,119 x 20 students (10 per session) = NOK 302,380.

(The amounts used above are only examples. When budgeting, you must use actual estimates/figures).

Other project-related costs (account categories 6 and 7***)

Under this budget category, all costs can be entered that do not fit into any of the other categories, but that are nevertheless considered necessary to expediently implement the project. For all such costs, grounds must be provided explaining why the cost is necessary for the project, and for the amount. Such costs can be approved after a concrete assessment.

Example: Costs under this budget category may include, for example, the cost of renting premises, the cost of necessary domestic transport or the cost of disseminating the project results.