An F&A calculation needs two things: the correct base and the rate that applies to it. Modified total direct costs, or MTDC, remove specified items from direct costs before applying a facilities and administrative rate.

Open the MTDC & F&A calculator to change the numbers as you read. It applies one supplied negotiated rate to one example period.

Start with the applicable base

The revised general definition in 2 CFR 200.1 includes the first $50,000 of each subaward. The revision’s applicability provisions also matter: an existing negotiated agreement may continue to govern the base. A recent calendar date alone does not select the right definition for an award.

NIH currently has a different indirect-cost basis. Its March 2026 definitions specify the first $25,000 of each subaward. The April 20, 2026 notice confirms continued application of the 45 CFR 75 indirect-cost provisions under FY 2026 appropriations and rescinds NIH’s adoption of the newer MTDC and de minimis provisions.

Work through one budget

This example has $180,000 in salaries, $54,000 in fringe, $25,000 in supplies, $8,000 in travel, $45,000 in equipment, $18,000 in tuition remission and one new $75,000 subaward. Direct costs total $405,000. The rate is an illustrative 55%, not a suggested institutional rate.

Under the general $50,000 subaward basis, the example excludes $45,000 in equipment, $18,000 in tuition remission and $25,000 of the subaward. The calculation is:

  • Direct costs of $405,000 minus exclusions of $88,000 produce an MTDC base of $317,000.
  • $317,000 multiplied by 55% produces $174,350 in F&A.
  • Direct costs plus F&A produce total example costs of $579,350.

Under the NIH $25,000 subaward basis, $50,000 of that same subaward is excluded. The MTDC base becomes $292,000, F&A becomes $160,600, and total example costs become $565,600.

Carry the subaward cap across periods

Suppose a subaward already had $40,000 in earlier costs and has $30,000 in this period. With a $50,000 cap, only $10,000 remains available for inclusion. This period therefore contributes $10,000 to MTDC and $20,000 to exclusions. The earlier $40,000 is not added to this period’s direct costs.

The cap applies separately to each subaward under the award and does not reset each budget year. OMB’s historical FAQ Q-116 explains that duration principle; its older dollar amount should not be substituted for the revised general threshold.

Check the assumptions before using a result

Use already-classified costs and the applicable rate agreement. The tool’s categories do not decide whether a purchase is equipment or whether a cost is allowable. Its single-rate example also does not model sponsor-specific F&A caps, multiple rate periods or a different negotiated base.