How Do You Build a Coherent Horizon Europe Project Budget?

12 December 2025 • Julien Sudre

How Do You Build a Coherent Horizon Europe Project Budget?

By Julien Sudre, Horizon Europe grant writing and project management specialist, founder of Grant 360 and Innotrope.

A coherent Horizon Europe budget starts with the work plan: identify what each beneficiary must deliver, estimate the people and resources required, apply the correct cost and funding rules, and check that every amount is consistent with the proposal. The objective is not to distribute money evenly among partners, but to make the proposed activities feasible and the requested contribution credible.

This practical guide explains how to move from tasks to a defensible budget, with an illustrative calculation and checks for both actual-cost and lump-sum grants. Always verify the specific call conditions and the applicable Grant Agreement (GA): the examples below are planning illustrations, not prescribed Commission benchmarks.

What should you do before entering figures in the budget table?

Build the budget from the work plan, not the other way around. Define the Work Packages (WPs), tasks, outputs, dependencies and responsible beneficiaries before estimating costs. Then identify the personnel, travel, equipment, external services and other resources needed for each activity.

For each task, record its responsible partner, timeframe, expected output, required profiles and estimated effort. A budget line should be traceable to an activity; conversely, an activity that requires resources should have a credible funding provision.

For example, if WP3 includes prototype validation at three sites, estimate the staff effort, site visits, consumables and testing services for each site rather than assigning each partner an arbitrary equal share of WP3.

How do you estimate personnel effort and costs?

Estimate the work in person-months (PMs), then ask each beneficiary to calculate its own defensible personnel-cost estimate. A person working full-time on the project for six months represents six PMs; a person working half-time for the same period represents three PMs. PMs are a planning measure, not by themselves the legal basis for declaring actual personnel costs.

Create a task-by-task staffing matrix covering the profile, partner, effort and rationale. Include scientific, technical, coordination, data-management and other personnel only where their work is necessary for implementation.

For actual-cost grants, personnel declarations must follow the applicable personnel-cost rules and eligible-cost conditions. Horizon Europe may also allow specific unit-cost options, where applicable. Do not calculate a universal hourly rate by dividing an annual salary by 1,720 hours: the applicable methodology must be checked against the GA and current official guidance.

Illustrative estimate: a partner plans 8 PM of engineering work at an internally justified planning cost of EUR 6,000 per PM and 3 PM of project management at EUR 5,000 per PM. Its estimated personnel budget is (8 x EUR 6,000) + (3 x EUR 5,000) = EUR 63,000. These figures are hypothetical estimates, not Commission-approved rates.

How should you budget travel and subsistence?

Estimate each necessary trip from its purpose, expected participants, duration and reasonable cost assumptions. Include consortium meetings, fieldwork, testing, stakeholder engagement and dissemination events only where they support the project plan.

A useful planning table specifies the event, number of travellers, transport, accommodation, subsistence and the responsible beneficiary. Apply the beneficiary's usual practices and the grant's eligibility requirements; do not assume that a single EU-wide per-diem schedule governs every Horizon Europe trip.

For example, budget two researchers attending a two-day validation workshop by estimating actual travel and accommodation needs. Where remote participation would achieve the same objective, explain why travel is or is not necessary.

How do you budget equipment, consumables and other purchases?

Separate equipment from consumables and other goods and services, and apply the eligibility rules relevant to each category. For equipment, the standard actual-cost approach generally concerns eligible depreciation attributable to the project, subject to the GA and any applicable call-specific option allowing other treatment. Exclusive project use does not, on its own, make the entire purchase price eligible.

Illustrative depreciation: a EUR 60,000 device depreciated over five years and used exclusively for the project for three eligible years could generate EUR 36,000 in attributable depreciation, assuming the organisation's usual accounting practices and all grant conditions support this treatment. If only half its use relates to the project, the attributable amount would be lower. The actual eligibility depends on acquisition timing, use, accounting records and the GA.

Specify consumables by activity and quantity rather than relying on a vague "miscellaneous" line. Other purchases may include necessary services, access fees, eligible publication charges or event-related costs, depending on their nature and the applicable rules.

When should you use subcontracting rather than purchase costs or personnel?

Classify an external contract according to what the provider will do, not simply because the supplier is outside the consortium. Subcontracting concerns the implementation of action tasks by a third party; purchases concern goods or services needed by beneficiaries to implement their own tasks. Individuals working under qualifying direct contracts may fall under personnel rules instead.

Subcontracting is not categorically prohibited for scientific activities, but it must satisfy the applicable conditions, be appropriately described and justified, and follow the procurement and best-value-for-money or lowest-price requirements where relevant. The coordinator's core responsibilities cannot simply be transferred to a subcontractor.

For example, an external laboratory carrying out a defined testing task may be a subcontractor, while buying standard laboratory consumables is a purchase. A graphic designer producing a brochure may be a purchased service rather than a subcontractor implementing a project task; assess the actual scope before classifying it.

How do you calculate indirect costs correctly?

For standard Horizon Europe actual-cost grants, calculate indirect costs at 25% of the eligible direct-cost base, excluding the categories specified in the rules. Exclusions include subcontracting, financial support to third parties and unit costs or lump sums that already include indirect costs; additional category-specific exclusions may apply. Do not simply multiply the entire direct-cost total by 25%.

Illustrative budget:

  • Personnel: EUR 100,000.
  • Travel and other eligible purchases: EUR 20,000.
  • Subcontracting: EUR 30,000.
  • Total direct costs: EUR 150,000.
  • Indirect-cost base: EUR 100,000 + EUR 20,000 = EUR 120,000.
  • Indirect costs: 25% x EUR 120,000 = EUR 30,000.
  • Total estimated eligible costs: EUR 180,000.

This simplified example assumes all listed amounts are eligible and no other exclusions apply. For a lump-sum proposal, include indirect costs in the detailed budget estimate as required by the applicable lump-sum methodology; do not add a second 25% on top of a lump sum that already includes them.

Which funding rate should you apply?

Check the action type, beneficiary status and specific call conditions before calculating the requested EU contribution. Under the general Horizon Europe rules, Research and Innovation Actions (RIAs) and Coordination and Support Actions (CSAs) have a maximum funding rate of 100%. Innovation Actions (IAs) generally have a maximum of 70%, with up to 100% for non-profit legal entities. Other action types and specific topics can have different arrangements.

For an illustrative IA beneficiary subject to a 70% rate, EUR 180,000 in eligible costs corresponds to a maximum requested EU contribution of EUR 126,000; the remaining EUR 54,000 must be financed from other permissible resources. A different rate or grant form changes the calculation.

See Funding rates and cost categories in Horizon Europe for a fuller explanation.

How should you allocate the budget among partners and Work Packages?

Allocate resources according to each beneficiary's actual responsibilities, workload and cost structure. There is no universal rule requiring the coordinator to receive a fixed percentage or every partner to have a similar budget.

Compare the budget by partner and WP against the effort matrix and task descriptions. A partner operating an expensive testing facility may legitimately need more resources than a partner contributing a smaller advisory role. Equally, a large allocation to a partner with few described activities deserves a closer explanation.

Check that the coordinator has enough resources for its coordination obligations and that communication, dissemination, exploitation and data-management activities are resourced according to the work actually planned. Do not invent a Commission-recommended percentage for management or dissemination.

How do you justify the budget in the proposal?

Explain the resource logic behind significant allocations and make the financial tables consistent with the technical narrative. In the relevant proposal template, describe why the requested personnel effort, major purchases, subcontracting and other resources are needed to achieve the outputs.

For example: "WP3 receives the largest share of the budget because it includes three validation sites, specialised testing and 24 PM of engineering effort. The corresponding equipment and external-testing costs are itemised in the partner budgets." This is stronger than asserting that the distribution is balanced without explaining the work.

Ensure that the proposal's Part A budget figures and Part B descriptions use consistent partner roles, task allocations and resource assumptions. Follow the actual template for the call rather than assuming that every action has identical narrative tables.

How does budgeting change for a lump-sum Horizon Europe project?

For a lump-sum proposal, estimate the resources required for the work in sufficient detail to justify the fixed contribution, then organise the budget by beneficiary and WP according to the call's methodology. The grant is not subsequently reimbursed by declaring the actual costs of each completed task; payment depends on the applicable rules for acceptance of completed WPs and the reporting arrangements.

This makes realistic WP design particularly important. Avoid combining activities with very different completion risks into an unnecessarily large WP if doing so would complicate acceptance and payment. A detailed internal budget remains useful for the consortium's own financial planning even where actual-cost declarations are not required for the lump-sum contribution.

For further context, see Financial management in Horizon Europe and Financial reporting and payments in Horizon Europe.

What should you check before submitting the budget?

Perform a final reconciliation of activities, effort, cost categories, funding rates and totals. Ask every beneficiary to validate its assumptions and confirm that its planned resources can support its assigned work.

Final checks include:

  • Work-plan consistency: can every major cost be traced to a task or project obligation?
  • Personnel: are effort estimates realistic and cost assumptions partner-specific?
  • Cost classification: are personnel, purchases and subcontracting correctly distinguished?
  • Equipment: is the applicable depreciation or other permitted method used?
  • Indirect costs: are the correct base and exclusions applied?
  • Funding rate: does the calculation reflect the action and beneficiary?
  • Proposal consistency: do Part A, Part B and the WP allocations tell the same story?
  • Delivery and cash flow: can partners carry out the work under the expected payment schedule?

For additional pitfalls, see Common financial management mistakes and ineligible costs and How Horizon Europe project payments work.

Conclusion: What makes a Horizon Europe budget coherent?

A coherent budget is a costed implementation plan. Start with tasks and outputs, estimate the people and resources needed, apply the correct financial rules, and check that each beneficiary's allocation matches its responsibilities. Transparent assumptions, justified exceptions and a final reconciliation between the work plan and financial tables are more useful than arbitrary partner percentages or superficially neat totals.

The same principle applies to actual-cost and lump-sum grants: a credible budget must show that the consortium has the resources to deliver what it proposes.

About the author

Julien Sudre specialises in Horizon Europe proposal development, project management and communication. Through his professional activities and Grant 360, he works with research and innovation organisations on European collaborative projects, from proposal preparation through implementation and reporting.

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