Direct costs are "those costs that can be identified specifically with a particular sponsored project relatively easily with a high degree of accuracy." For example, the salary of a direct service provider or the purchase of specific supplies for a specific project are direct costs.

They must be:

• Allowable (as described by federal cost principles and according to federal regulations and grant guidelines)
• Reasonable (what a prudent person would spend);
• Allocable (limited to that portion of expenses directly benefiting the project and consistently treated as direct charges).