One of the European Commission (EC) objectives is to simplify and reduce the administrative workload in EU-funded projects. Personnel costs can sometimes be overwhelming and become a source of financial errors.
To make Horizon Europe (HE) simpler for beneficiaries, EC introduced the Personnel Unit costs – one single daily rate for beneficiaries to charge all their personnel costs in HE actions.
Let’s understand the benefits and the main caveats of choosing Personnel Unit Costs.
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The Personnel Unit Costs replaces the personnel costs categories (A.1 Employees, A.2 Natural persons with direct contract, A.3 Seconded persons against payment, or A.4 SME owners and natural person beneficiaries), charging all personnel costs with a single daily rate under a new category, the A.6 Personnel Unit Costs.
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The daily rate to be used must be requested and approved for each organisation in the Portal Participant Register.
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The calculation method is based on the total expenditure of the beneficiary for all the staff (not only personnel working on research and innovation actions), in the last closed full financial year. If you are interested, you can use the Personnel Unit Costs Wizard to calculate the daily rate that would apply to you.
The request to adopt the Personnel Unit Costs can be initiated in two different ways:
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by the LEAR in the Participant Register in the Special cost methods tab (“Choose Cost Method”), at any given moment;
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by the PaCo/PFSIGN (project financial signatory) directly in the Portal Grant Management System by filling in the personnel unit cost field in the Financial Information screen, during grant preparation of a successful proposal. This will have to be accepted by the LEAR.
Then, the LEAR will be prompted to fill out the online personnel unit cost form (i.e. formal request) in the Participant Register, with details on the requested unit cost and to upload an audit certificate.
The daily rate will only be implemented in the next proposal selected for funding that reaches the grant preparation (GAP) stage. For other ongoing projects in GAP phase that have not yet been signed, you can use the new unit cost only if the granting authority and your partners agree to a recalculation of the budget distribution within the consortium and if the project data can still be changed in the system (i.e. project before GAP Approval step).
However, there are important points to consider before adopting this system:
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Once approved, the defined daily rate must be used in all Horizon and Euratom actions and can only be updated every 2 years until 31 December 2027. Additionally, the daily rate is limited to the country-specific cap.
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After adopting the Personnel Unit Costs, it is possible to revert the decision to use actual personnel costs again, but it is not possible to go back to Personnel Unit Costs before 31 December 2027. Furthermore, these changes will only apply to new grants and not ongoing projects.
Finally, timesheets will continue to be mandatory, so record the time spent on the project, following the capping rule of 215 days per financial year. While unit costs are not normally subject to financial audits, as we explained in our article Lump Sum vs Actual Costs: Understanding the Differences, you should keep standard accounting practices to ensure that, if needed, you can show that personnel unit costs are not being misused.
If you need further clarification about Personnel Unit Costs, don’t hesitate to contact us at contact@syntropie.eu.