Direct Costs vs Indirect Costs

Difference between Direct Costs and Indirect Costs in Project Cost Management

Direct Costs

  • Costs that can be directly attributed to a specific project
  • Included in the project budget
  • Examples:
    • Labor costs
    • Materials costs
    • Resource costs

Indirect Costs

  • Costs that cannot be directly attributed to a specific project
  • May or may not be included in the cost estimate
  • Basis of Estimates tell whether indirect costs are included in the project budget
  • Examples:
    • Management costs
    • General administration costs
    • Building rental
    • Utility costs
Last updated: September 09, 2018