How to Budget Labor Expenses in a Grant Application

Including labor expenses in your grant budget isn’t just about getting the numbers right—it’s about showing the funder that you’ve thought through how the project will be executed and that your team has the support they need to succeed.

1. Direct Salaries and Wages

When calculating labor expenses, start with direct salaries and wages for the staff who will be working on the project. This is where you account for the time your employees spend on project-related tasks. For example, if your project manager is dedicating 40% of their time to the project, your budget should reflect 40% of their salary.

2. Benefits and Payroll Taxes

Beyond salaries, your budget must account for benefits like health insurance, retirement contributions, and payroll taxes. Funders expect you to present the full cost of employing your team, not just the wages. This ensures you have enough resources to support your staff for the duration of the project.

3. Contractor or Consultant Fees

In some cases, your project may require expertise from outside your team. This is where contractor or consultant fees come into play. Clearly outline why external help is needed and how much it will cost. Funders appreciate transparency and want to know that these additional expenses are justified.

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