Webinar on Personnel Costs in Horizon 2020
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1 Webinar on Personnel Costs in Horizon 2020 Welcome! We will start the webinar 10:00 CET. The presentation slides and recording will be published on in due time after the webinar.
2 Personnel costs in Horizon 2020 Webinar 20 th February 2018 Morten Gylling, DAFSHE, NCP Academy Partner Melanie Büscher, Brain2Business, former NCP
3 Who are we? NCP since 2015 Legal/Finance and MSCA Has worked with FPs since 2010 Loves giving participants subtle hints on what procedures could be a bit too creative with regards to EU. NCP from 2007 to 2017 mostly Legal/Finance Since October 2017: own company as certified facilitator and trainer Enjoys discussing EU rules and reporting requirements.
4 In your view, what could this picture have to do with personnel costs? Please use the chat
5 Slide from FP9 workshop: /research/participa nts/data/ref/h2020/ other/events/ /3b_simplifiedfundingmodel_en.pdf
6 Source: /Lists/ECADocuments/annu alreports- 2016/annualreports EN.pdf, page 155
7 What are we going to talk about? Principles of eligibility Types of personnel Basic remuneration and additional remuneration Specific cases, such as parental leave Calculation of the hourly rate Calculation of the hourly rate per month Some good advice
8 Winning a H2020 grant is almost like winning the lottery. But not when it comes to spending the money
9 Principles of eligibility of costs Costs must be actually incurred by the beneficiary The salary must be based on real costs paid to employees in the organisation. Not estimated or budgeted costs. Not costs borne by another entity (e.g. affiliated company).
10 Principles of eligibility of costs Costs must be incurred during the project period Exception: personnel costs related to preparing the final report.
11 Principles of eligibility of costs Costs must be indicated in the estimated budget of the action But budget transfers are possible if your clients spend more or less money than expected.
12 Principles of eligibility of costs Costs must be incurred in connection with the action as described in Annex 1. This is particularly important to remember in relation to personnel costs and travels, conferences and other activities. They might be relevant for the action but are they necessary for its implementation?
13 Principles of eligibility of costs Costs must be identifiable and verifiable and recorded in the accounts of the beneficiaries. Your clients must be able to show what was actually paid to the employees. Costs must be in compliance with applicable national laws on taxes, labour and social security.
14 Principles for eligibility of costs And finally, costs must be: - reasonable - justified - and in compliance with the principles of sound financial management, in particular regarding economy and efficiency Your clients may not increase the remuneration of their personnel just because they get a Horizon 2020 grant.
15 Principles for eligibility of costs
16 Types of personnel 1. Employees (both permanent staff and temporary). They have an employment contract or equivalent appointing act with the beneficiary and they are assigned to the action 2. Natural persons working under a direct contract ( self-employed natural persons ) 3. Personnel seconded by a third party against payment 4. SMEs owners not receiving a salary 5. Natural persons not receiving a salary, when they are a beneficiary themselves
17 External consultants External consultants are not considered personnel even if they are in-house Their costs may be reimbursed under other direct costs or subcontracting (it depends )
18 Documentation! Employment contract (or equivalent) Assigned to the action Working on the project time records Minimum requirements The number of hours worked for the action in the period covered by the time record Must match records of annual leave, sick leave and work-related travel Additional formalities (see art. 18 AGA) Remember: no documentation no eligibility of costs!
19 Time sheets minimum requirements TIME RECORDING FOR A HORIZON 2020 ACTION Minimum requirements Title of the action (acronym): Grant Agreement No: Beneficiary s / linked third party's name: Name of the person working on the action: Type of personnel (see Art. 6.2.A Grant Agreement) Month [Month / Year] [Month / Year] [Month / Year] [Month / Year] [Month / Year] [Month / Year] Total Number of hours Work packages (of Annex 1) to which the person has contributed by the reported hours Date and signature of the person working for the action Name, date and signature of the superior
20 Minimum requirements according to article 18 research/participant s/data/ref/h2020/gr ants_manual/amga/ h2020-amga_en.pdf
21 Basic remuneration and additional remuneration basic remuneration: the payments for the employee's normal work and participation in projects up to what is the beneficiary's usual remuneration practice for national projects additional remuneration (only for non-profit legal entities): extra payments made for the participation in projects above the beneficiary's usual remuneration practice for national projects.
22 Basic remuneration and additional remuneration not only cover the payment itself (salary or bonus) but also the social security contributions (mandatory employer and employee contributions), taxes included in the remuneration (e.g. income tax) and other costs and payments included in the remuneration (e.g. a fee paid by the beneficiary for a complementary health insurance scheme for the employee).
23 What does salary in your home country include?
24 Basic remuneration: conditions Allowed bonuses based on the overall financial performance of the organisation (e.g. profitability or surplus) bonuses paid in accordance with national law, the collective labour agreement and the employment contract/equivalent appointing act Not allowed dividends to employees (profit distribution) any part of the remuneration which is based on commercial targets or fund raising targets bonuses which are not part of the beneficiary's usual remuneration practices and/or which are not based on objective conditions
25 Additional remuneration: conditions Allowed be a non-profit legal entity be paid for the performance of additional work or different expertise than his/her usual tasks consistently applied whenever the same kind of work or expertise is required and regardless of the source of funding used Not allowed may not differ according to where the funds come from may not be subject to budget availability (i.e. only to be paid if there is remaining funds in the project budget) may not exceed 8000 EUR per year
26 Specific cases Costs during parental leave only if mandatory (under national law, labour agreement, employment contract) and actually incurred, not reimbursed by others Costs for students, PhDs and other researchers under fellowships, scholarships etc. agreement has to be work-oriented (not training-oriented) and only for the hours worked on the project Recruitment costs Not eligible (unless ERC)
27 Specific cases Teleworking Personnel not working on the premise of the beneficiary only if usual practice Costs of benefits in kind (company car, lunch vouchers) Only if usual remuneration practice Supplementary contracts for participation in projects Only if usual practice and compatible with national law Public officials (in some countries, they get paid directly from central budgets) may be considered eligible (as in-kind contribution free of charge)
28 Calculation of hourly rate
29 Calculation of hourly rate
30 Calculation of hourly rate Personnel costs = Number of registered hours x hourly rate Hourly rate = Eligible annual salary costs Number of annual productive hours NB: hourly rate used has to be based on last closed financial year
31 How to calculate annual productive hours Three options (article 6.2.A) a) hours b) Individually per person c) Standard calculation per institution The total number of hours per person per year charged cannot be higher than the annual productive hours used.
32 Which model to chose? 1720 hours Easy and low level of bureaucracy. No questions asked by auditor Might give a low hourly rate, depending of normal working hours and holidays in your country Individual annual productive hours If only a few people working on the H2020-project Easy, if you have full-time time recording You have to be able to document absence and overtime Gives the real project-related hourly rate
33 Which model to chose? Standard annual productive hours Good when many different people working on different H2020-projects Gives better hourly rate than the first option Requires an annual calculation (and documentation of how you have calculated it) In your calculation, EU auditor accepts that up to 10% of your working time is used on other activities than H2020-project as well as sickness, trainings etc. If your calculation results in a lower number, that is fine, but you have to adjust the norm you charge to the project then (90 % rule). The choice is made for the entire legal entity!
34 Absences and overtime a) hours Only actual time spent on parental leave may be deducted. No overtime may be added. b) Individually per person All leaves must be deducted to calculate annual productive hours. All overtime must be added to annual workable hours to calculate annual productive hours. c) Standard calculation per institution Normally, standard time of absence already taken into account. Parental leave may be deducted on top. Normally, overtime already taken into account.
35 Additional option calculation of hourly rate per month Hourly rate = Eligible annual salary costs Number of annual productive hours/ 12 Only if option (i) 1720 or (iii) standard annual productive hours Only one option for each financial year per beneficiary
36 Additional option calculation of hourly rate per month Hourly rate = Eligible annual salary costs Number of annual productive hours/ 12 Parental leave: time spent on parental leave may not be deducted when calculating the hourly rate per month. Personnel costs incurred during this period may be declared Bonus etc: only the share which is generated in the month
37 Specific cases SMEs owners and natural persons not receiving a salary Must declared as unit costs using the MSCA rate: 4,650 euro / 143 hours x country correction coefficient Automatically calculated in the reporting system. NCP advice: remember to indicate this during GAP.
38 Question to participants Thinking back of the three models for annual productive hours, which details do you remember best?
39 Summary - What have we talked about? Principles of eligibility Types of personnel Basic remuneration and additional remuneration Specific cases, such as parental leave Calculation of the hourly rate Calculation of the hourly rate per month And now - some good advice
40 Ask participants When you think back at what we have touched upon which piece of advice on personnel costs do give your next client (in chat)
41 Some advice from us It is a jigsaw puzzle with small pieces adding up to one big picture Time spent on the project needs to be documented (time sheets!) Beneficiaries have to calculate an hourly rate Beneficiaries report costs, not price Remuneration has to be documented It is like winning the lottery, but with a lot of rules No work-arounds with regards to personnel
42 Thanks for your participation If you have any questions, please use the chat feature in the lower left corner of your screen.
43 Q&A session Stay tuned! Next webinar on Other Direct Costs will start at 12:00 CET: The presentation slides and recording will be provided on in due time.
44 This project has received funding from the European Union s Horizon 2020 research and innovation programme under grant agreement No
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