Personnel costs in Horizon Europe are generally calculated by multiplying an eligible daily rate by the number of day-equivalents worked on the action. To declare them correctly, beneficiaries must first identify the appropriate personnel category, determine which remuneration is eligible, document the work performed and apply the calculation method permitted by their grant agreement.
Personnel expenditure often represents a substantial share of a research project's budget. Errors can arise from apparently small details: an incorrectly classified consultant, an unsupported bonus, an inconsistent time record or a daily-rate denominator that does not reflect the person's employment period. This guide explains the main rules for actual-cost Horizon Europe grants, with practical examples and checks for financial reporting.
Scope: This article addresses the standard personnel-cost rules in the Horizon Europe corporate Model Grant Agreement (MGA). Lump-sum grants, programme-specific options and individual grant agreements may use different reporting arrangements. Always check the applicable call conditions, Data Sheet, Article 6 and the current Annotated Grant Agreement (AGA).
What personnel costs are eligible under Horizon Europe?
Eligible personnel costs must relate to work on the action and satisfy the general eligibility conditions of the grant agreement. For standard actual-cost grants, they must be identifiable, verifiable, properly recorded, necessary for the action and compliant with applicable law and the beneficiary's usual practices. The specific eligibility conditions depend on the personnel category.
Personnel costs are not limited to researchers. Project managers, technicians, administrative staff and other workers may qualify when their work is necessary for the action and appropriately documented.
A useful distinction is between planning and reporting: proposals use reasonable estimates of staff effort and employer costs; financial statements generally use eligible costs and documented effort established during implementation.
Which personnel categories can beneficiaries declare?
Horizon Europe distinguishes four standard personnel categories (A.1–A.4). The correct category depends on the legal relationship between the individual and the beneficiary—not on the person's job title.
| Category | Who it covers | Main eligibility consideration |
|---|---|---|
| A.1 Employees (or equivalent) | Employees and persons appointed under equivalent acts, including eligible statutory staff | Employment or appointment relationship, eligible remuneration and documented work on the action |
| A.2 Natural persons under direct contract | Individuals directly contracted by the beneficiary, other than under an employment contract | Conditions similar to those of employees, appropriate remuneration and other MGA requirements |
| A.3 Seconded persons against payment | Staff made available by a third party to work for the beneficiary | Secondment arrangement, eligible payment and the conditions in the MGA |
| A.4 SME owners and natural-person beneficiaries | Eligible SME owners or natural-person beneficiaries working without receiving a salary | Special unit-cost calculation, rather than an ordinary payroll-based daily rate |
Can self-employed consultants be reported as personnel?
Sometimes—but an invoice alone does not make a consultant eligible under A.2. A direct contract with a natural person must satisfy the applicable conditions, including work under conditions similar to those of an employee, appropriate remuneration and the relevant rights over results. An external company providing consulting services is not an A.2 natural person.
If the arrangement does not meet the personnel rules, assess whether it is a purchase of services or subcontracting. Subcontracting concerns action tasks entrusted to an external provider; purchases cover other goods and services needed for the action. The distinction affects procurement, budgeting and indirect-cost treatment, as explained in our guide to subcontracting in Horizon Europe.
Can interns, PhD students or temporary workers qualify?
Their eligibility depends on their actual legal and financial arrangement, not their title. A paid doctoral researcher or trainee employed under an eligible employment or equivalent appointment may fall under A.1. A student grant, scholarship, unpaid placement or agency arrangement must be assessed separately against the relevant grant rules. Unpaid volunteers do not generate actual salary costs, although a specific volunteer unit-cost category may be available where expressly provided for in the grant agreement.
Do not automatically exclude all interns or students, or classify all temporary staff as employees of the beneficiary. Ask HR to verify the contract and who actually incurs the cost.
How is the Horizon Europe daily personnel rate calculated?
Under the standard reporting-period method, the daily rate is based on eligible personnel costs for the reporting period divided by the applicable maximum declarable day-equivalents for that period. The rate is then multiplied by the eligible day-equivalents worked on the action.
In simplified form:
Personnel costs for the action = Daily rate × Day-equivalents worked on the action
Daily rate = Eligible personnel costs for the relevant period ÷ Maximum declarable day-equivalents for that period
For a full-time employee working throughout a 12-month period, the standard annual reference is 215 day-equivalents. The maximum is adjusted for shorter periods and part-time work according to the MGA rules. It is not a requirement to prove that the employee worked exactly 215 days during the year.
Example: calculating a daily rate
Suppose a full-time employee has €64,500 in eligible personnel costs over a complete 12-month reporting period and works 80 day-equivalents on the Horizon Europe action.
| Calculation | Amount |
|---|---|
| Eligible personnel costs | €64,500 |
| Maximum declarable day-equivalents | 215 |
| Daily rate | €300 |
| Action day-equivalents | 80 |
| Personnel costs declared for the action | €24,000 |
This is an illustrative calculation, assuming the entire amount qualifies and no special adjustments apply. The declared effort must be supported by acceptable records and must not be charged twice to different actions.
What happens if an employee works part-time or joins mid-year?
The denominator must reflect the relevant employment period and working-time factor. For example, a person employed at 50% for a full year does not use the same maximum declarable day-equivalents as a full-time employee. A person joining halfway through the reporting period requires an appropriately shortened calculation period.
Contractual changes, remuneration changes and absences can also affect the calculation. Their treatment is not always a matter of simply subtracting every day of leave from 215: apply the AGA's rules to the specific situation, including any relevant sub-periods and adjustments.
What salary components can be included in personnel costs?
Eligible remuneration can include basic pay, employer social contributions and certain additional remuneration or benefits, provided the relevant MGA conditions are met. Eligibility depends on the legal basis, actual accounting treatment and usual remuneration practices—not simply on whether a payment appears on a payslip.
| Remuneration item | Practical approach |
|---|---|
| Basic salary | Generally eligible when incurred for eligible staff and recorded correctly |
| Employer social security contributions | Generally eligible where applicable and actually incurred |
| Statutory or contractual allowances | Assess against the applicable eligibility conditions |
| Bonuses and additional remuneration | Check the MGA's specific rules; do not assume all bonuses are excluded |
| Project-specific incentives | Require careful assessment; some arrangements may be ineligible or subject to special conditions |
| Unpaid or purely notional salary | Not an actual payroll cost under A.1; check whether a specific unit-cost category applies |
Important: A blanket rule excluding every discretionary bonus is inaccurate. Horizon Europe contains specific provisions for additional remuneration, including conditions that may apply to non-profit legal entities. Document the basis for any amount included and consult the AGA before declaring unusual payments.
What is the difference between the reporting-period and calendar-year methods?
The standard method calculates the daily rate for the reporting period; an optional calendar-year-based method may be available where the applicable grant-agreement rules permit it. The calendar-year approach calculates rates using relevant calendar-year figures and allocates them to the reporting period.
The two methods can produce different rates, especially where salaries or employment conditions change. The optional method is not a universal free choice for every grant or every beneficiary: check whether it is available under your signed agreement and comply with its conditions, including any consistency requirements.
Before configuring an accounting system, confirm the chosen method with the finance department and document it in an internal procedure.
How should working time be recorded?
Beneficiaries must keep reliable evidence of the day-equivalents worked on the action. Horizon Europe accepts appropriate time-recording systems, including monthly declarations of day-equivalents, provided they satisfy the applicable requirements. Hourly records may also be used if converted using an accepted method.
A practical monthly declaration should identify the person, action, month, number of day-equivalents and required signatures or approvals. Records should be consistent with employment arrangements and other available evidence.
Can hourly timesheets still be used?
Yes. Hours can be converted into day-equivalents using an authorised approach under the AGA. The method should be documented and consistently applied. Do not assume that every organisation must use an eight-hour day: the applicable conversion rules offer alternatives based on working-time arrangements.
Is there a limit of 215 days per year?
The 215-day figure is the standard annual reference used in calculating maximum declarable day-equivalents for a full-time person. It is adjusted for relevant employment periods and part-time arrangements. Controls must also prevent double charging across EU actions and other funding sources.
The 215-day reference should not be confused with the person's actual calendar days worked or the number of days recorded in an internal HR system.
How are SME owners without a salary reimbursed?
Eligible SME owners and natural-person beneficiaries working without a salary use a specific unit-cost approach rather than the ordinary payroll daily-rate calculation. The applicable unit cost is derived using the relevant Marie Skłodowska-Curie Actions reference and country-related adjustment, according to the rules and rates applicable to the grant.
Do not calculate an A.4 claim by inventing a notional salary or by dividing company turnover by 215. Check the applicable unit-cost rate, eligibility conditions and evidence of work performed before submitting the financial statement.
What evidence should be retained for an audit?
The strongest audit file connects the legal relationship, eligible remuneration, recorded effort and the declared amount. A payslip by itself does not prove the days spent on the action; a timesheet by itself does not prove the salary cost. These controls also help prevent the most common Horizon Europe financial-management errors.
| Evidence | What it helps establish |
|---|---|
| Employment, direct-service or secondment agreement | Correct personnel category and applicable conditions |
| Payroll records and accounting entries | Actual remuneration and employer costs |
| HR policies and remuneration rules | Consistency with usual organisational practices |
| Monthly day-equivalent declarations or approved time records | Work charged to the action |
| Daily-rate calculation workbook | Reproducibility of the reported amount |
| Work-plan assignments, relevant outputs and activity records | Connection between the declared work and the action |
| Internal review and approval records | Quality control and prevention of double charging |
The exact documentary requirements depend on the category and the grant agreement. Keep evidence according to the contractual record-retention period and applicable data-protection rules.
How should personnel costs be estimated when writing a proposal?
At proposal stage, estimate the staff effort needed for each task and apply credible employer-cost assumptions. A practical starting point is to calculate person-months by partner, role and work package, then convert the estimated effort into budgeted costs using the organisation's relevant payroll assumptions. Our guide to building a coherent Horizon Europe budget provides the wider budgeting framework.
For example, a partner planning 12 person-months of engineering work at an estimated employer cost of €6,000 per person-month would budget €72,000 for that role. This is a proposal estimate, not a future financial-reporting entitlement.
Check that the proposed resources support the activities described in Part B and are consistent with the financial information in Part A. Underbudgeting may undermine delivery; overbudgeting without clear justification may raise questions about the credibility of the implementation plan.
What are the most common personnel-cost mistakes?
| Mistake | Why it matters | Preventive control |
|---|---|---|
| Declaring a company consultant as A.2 personnel | Wrong cost category | Review the contract and supplier status |
| Using a flat estimated rate for actual-cost reporting | Amount may not reflect eligible incurred costs | Recalculate using eligible accounting data |
| Automatically excluding or including all bonuses | Remuneration rules are more nuanced | Review the MGA conditions and internal policy |
| Ignoring part-time or mid-period contract changes | Wrong maximum day-equivalents or rate | Review HR changes before reporting |
| Incomplete or inconsistent time records | Effort cannot be adequately substantiated | Monthly approvals and periodic reconciliations |
| Charging the same effort to multiple grants | Double funding risk | Cross-project effort controls |
| Treating 215 as actual working days | Misunderstands the denominator | Use the AGA's calculation methodology |
What should project managers check before submitting personnel costs?
Use this checklist with HR and finance before each periodic report:
- Confirm that each person is assigned to the correct personnel category.
- Verify the employment or contractual arrangement and relevant eligibility conditions.
- Reconcile eligible remuneration with accounting and payroll records.
- Apply the daily-rate method permitted under the grant agreement.
- Check reporting periods, working-time factors and relevant changes in employment conditions.
- Verify the supporting time records and required approvals.
- Check that day-equivalents are consistent across all actions and funding sources.
- Reconcile reported personnel costs with the financial statement and internal records.
- Retain the calculation files and supporting documents for potential checks or audits.
Frequently asked questions about Horizon Europe personnel costs
Are personnel costs based on actual salary or budget estimates?
For standard actual-cost grants, financial reporting generally relies on eligible costs actually incurred, whereas proposal budgets use reasonable estimates. Specific unit-cost categories and lump-sum grants follow their own rules.
Can project management and administrative staff be charged?
Yes, when their work is necessary for the action and satisfies the relevant eligibility and documentation requirements. Their job title alone does not determine eligibility.
Can an employee work on several Horizon Europe projects?
Yes. The same person may contribute to several projects, but the recorded effort must be credible and the same time or cost cannot be charged twice.
Do beneficiaries have to record exact working dates?
Not necessarily. An acceptable monthly declaration of day-equivalents may be used where it meets the applicable conditions. Beneficiaries using another system must retain equivalent reliable evidence.
Are personnel costs calculated in the same way for lump-sum grants?
No. Lump-sum grants generally do not reimburse personnel expenditure through the same actual-cost declarations. Beneficiaries still need to plan resources realistically and meet the grant's implementation and evidence requirements.
Does every bonus count as an eligible personnel cost?
No. The treatment depends on the nature of the remuneration, the beneficiary's usual practices and the specific MGA provisions. Review unusual or additional remuneration before including it.
Conclusion: how can beneficiaries make personnel-cost reporting more reliable?
Reliable Horizon Europe personnel-cost reporting depends on four linked controls: correct classification, eligible remuneration, documented effort and reproducible calculations. The daily-rate system simplifies part of the arithmetic, but it does not replace coordination between project management, HR and finance.
Start with the contractual rules, establish a documented internal process and reconcile the figures before each reporting deadline. That approach makes personnel budgets more credible and financial declarations easier to explain and defend.
Official sources and further reading
- European Commission — EU Funding & Tenders Portal: grant agreements, programme documents and guidance applicable to each call.
- European Commission — Horizon Europe programme: programme context and official resources.
- European Commission — EU Grants: Annotated Grant Agreement: detailed guidance on Article 6, personnel categories, daily rates and time records. Consult the version applicable to your grant.
Editorial note: The examples in this article are illustrative and do not replace the terms of an individual grant agreement or professional accounting advice.