Funding rates and own contribution: how much of your project a grant really covers

The funding rate (Förderquote) is the percentage of your eligible costs that a grant covers. Everything else is your own contribution (Eigenanteil): the unfunded share of eligible costs plus any costs the programme does not recognise. For company R&D projects in Germany, most programmes follow the EU General Block Exemption Regulation (GBER, in German AGVO), which caps aid at 50 % for industrial research and 25 % for experimental development, with bonuses for small and medium-sized enterprises up to a maximum of 80 %.

Eligible costs come first

A funding rate never applies to your whole budget. It applies only to eligible costs (zuwendungsfähige Kosten or Ausgaben) as defined in the programme guideline. These typically include staff, materials, subcontracting, depreciation of equipment and sometimes an overhead flat rate. Costs incurred before the approved start date and general sales costs are usually excluded.

The calculation works like this:

1. Add up the total project costs.
2. Subtract ineligible costs to get the eligible costs.
3. Multiply eligible costs by the funding rate to get the maximum grant.
4. Total costs minus the grant equals your own contribution.

Most German grants are proportional (Anteilfinanzierung): if your actual costs turn out lower, the grant shrinks accordingly. A fixed-amount grant (Festbetragsfinanzierung) works differently. Your grant decision states which type applies.

GBER ceilings for research and development

Article 25 of the GBER sets the maximum aid intensity per beneficiary. Base rates and SME bonuses (Art. 25(5) to (7)):

For industrial research and experimental development, Art. 25(6) allows further bonuses, again up to a ceiling of 80 %:

• 15 percentage points for effective collaboration (between companies including at least one SME across at least two countries, or between companies and research organisations), wide dissemination of results, licensing of protected results at market prices, or projects in certain assisted regions.
• 5 percentage points for projects in other assisted regions.
• 25 percentage points for specific projects designed jointly by several Member States.

According to the regulation, these three bonuses cannot be combined with each other, but each can be combined with the SME bonus. Whether you count as small or medium is decided by the EU definition explained in our guide to the EU SME definition.

Other schemes have their own rates. In Horizon Europe, for-profit companies receive 70 % in Innovation Actions and 100 % in Research and Innovation Actions. Germany’s tax-based research allowance (Forschungszulage) is 25 % of the assessment base, or 35 % for SMEs on application.

Worked example

The figures below are invented for illustration only. A small enterprise runs an experimental development project, and the programme uses the full GBER ceiling.

In option B, the collaboration bonus requires the research organisation to bear at least 10 % of the costs and to be allowed to publish its results. Whether a programme offers this bonus at all is decided by its guideline, not by the GBER.

Financing your share

Companies usually cover their own contribution from equity, cash flow, bank loans or promotional loans. Keep the cumulation rule in mind: other state aid for the same costs counts towards the ceiling, and subsidised loans often contain an aid element themselves. Our guide on loans versus grants explains how the instruments fit together.

Pre-financing and payment

An approved grant is not paid upfront in full. The usual sequence:

1. Approval: the decision sets the rate, maximum amount, duration and conditions.
2. Spending: you pay salaries, materials and subcontractors first.
3. Funds request (Mittelabruf): you claim the funded share for costs already incurred or due shortly.
4. Reporting: the funding body checks interim and final reports; part of the grant is often released only after the final proof of use (Verwendungsnachweis).

EU projects such as Horizon Europe normally start with a pre-financing payment, followed by payments after each reporting period. The research allowance is only assessed after the end of the financial year. In every case, plan your liquidity for several months of advance spending.

If you want help with the calculation, our directory of grant consultants lists specialised advisers.

Sources

• EUR-Lex: Regulation (EU) No 651/2014 (GBER), in particular Art. 6, 8 and 25
• FFG: Funding rates in Horizon Europe
• German Federal Ministry of Finance: Research allowance
• Federal funding database (Förderdatenbank)

This guide does not replace tax or legal advice; the programme guideline and the grant decision of the funding body are binding.