Lump Sum vs Actual Costs vs Unit Costs
Understanding EU grant funding types can be confusing. Here's how the most common ones compare — and what you need to know when preparing your proposal.
Lump Sum
You get a fixed amount once work is completed — no need to report real expenses.
Best for
Simpler financial reporting, clear work packages, small teams
Risk
If you overspend, the EU won't reimburse more
Example
Your proposal includes:
- Work Package 1 = €50,000
- Work Package 2 = €30,000
➡️ If WP1 is completed and approved, you get €50,000 — even if it cost €40k or €60k.
Actual Costs
You are reimbursed based on the real costs you incurred, supported by invoices, payroll, time sheets, etc.
Best for
Research institutions, complex R&D, personnel-heavy projects
Risk
Requires strong accounting & documentation
Example
You hire a researcher, travel to conferences, buy software — all costs are tracked and submitted for reimbursement.
Unit Costs
You get a fixed amount per unit (e.g. per researcher/month, per participant, per mobility).
Best for
Erasmus+ mobility, MSCA fellowships, repeatable activities
Risk
May over/underpay if your real costs differ
Example
A mobility grant offers €1,200 per participant. Whether you spend €1,000 or €1,400, you receive €1,200.
Quick Comparison
| Feature | Lump Sum | Actual Costs | Unit Costs |
|---|---|---|---|
| Requires receipts? | ❌ No | ✅ Yes | ❌ No |
| Financial admin | 🟢 Low | 🔴 High | 🟢 Low |
| Flexibility | 🔶 Medium (within WP) | 🟢 High | ❌ Fixed per unit |
| Risk | If over budget, you lose the difference | If rejected, you don't get paid | Low, but less tailored |
| EU Programmes | Horizon, Erasmus+, Digital Europe | Horizon, CBE, EDF | Erasmus+, MSCA |
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