Method 1 – Hourly rate times actual hours worked
The following three elements must be known in order to calculate the cost per employee that can be charged to the project on the basis of the hours actually worked on the project:
– Annual productive hours
A default value of 1720 total annual productive hours is used for those beneficiaries exempted from keeping timesheets. In case the beneficiary wishes to use an amount other than 1720 hours, it must justify the alternative figure on the basis of a reliable time registration system. The total actual annual productive hours for each employee is the time actually worked according to the time registration system. It will normally result in a different number of annual working time units for each employee. The following time is considered ‘non-productive’ and should not be included in the total: holidays actually taken, bank holidays, flexitime compensation, weekends, parental leave, sickness or other similar absences. However, if due to the character of the work, some of it has to be done during bank holidays or on weekends, this time should be included in the productive time. Time used on meeting activities, training and similar activities is considered as productive time.
– Actual salary
This must be taken from the payroll and should be the total gross remuneration, any other statutory costs provided that these costs are in line with the beneficiary’s usual policy on remuneration and the employer’s portion of social charges. Remuneration costs should be calculated individually for each employee on an annual basis.
Please note that the annual gross salary should not be calculated on the basis of a monthly salary times 12. If an employee has not worked a full calendar year for the beneficiary (i.e. starting date of employment or end date of employment falling during the calendar year), the gross salary should not be extrapolated to a yearly figure, but in such cases the gross salary of the corresponding employment duration during the calendar year should be used. Similarly, the productive hours should reflect the period in which the employee has actually worked at the beneficiary’s place.
Any additional and individual pension schemes and/or sickness insurance are not eligible, nor are company cars, bonuses4 or any other similar fringe benefits. Dividends or profit sharing are also not eligible.
Estimations or average salaries cannot be accepted. The rates indicated in the project budget in the grant agreement are only indicative and cannot be the default reference when reporting personnel costs.
– Working time
Only the costs of the actual hours worked on the project may be charged. The actual hours that each employee spends working on the project shall be recorded using timesheets or an equivalent time registration system established and certified by the employee and the employer. For staff working on tasks other than the LIFE project for the same employer, any working time spent on professional tasks unrelated to the project shall also be recorded. Personnel working for the LIFE project less than 2 full days per month on average within a calendar year are exempted from the time registration obligation for the calendar year. (Note that in this last case, the default number of 1720 annual productive hours must be used.)
Calculation of the hourly rate:
The hourly rate for a given year is obtained by dividing the actual annual gross salary or wages plus employer’s portion of obligatory social charges and any other statutory costs included in the remuneration of an employee by the total annual productive hours (1720 hours standard for those beneficiaries not required to use timesheets or as registered in the timesheets). Hourly rates shall be calculated on a yearly basis.
Method 2 – Gross Salary
For personnel working full time for the project, or for a contractually defined percentage of time, the eligible salary cost will be calculated proportionally on the basis of the actual annual gross salary plus employer’s portion of obligatory social charges and any other statutory costs included in the remuneration of an employee as defined above. In this case, the beneficiary must justify the individual secondment/assignment by providing a contractual document or a letter of assignment signed by the responsible service or authority of the relevant beneficiary. It shall contain at least the following details: name of employee, function in the project and description of the tasks assigned for the project, explicit indication of the specific time percentage or full time nature of the assignment, start and end date of the assignment period. Personnel whose costs are charged on this basis are exempted from the time registration obligation.