2 CFR 200.445 sets 2 requirements for organizations that receive federal grants and cooperative agreements. Applies when you build your application and budget, and to every cost you charge after award.
Costs of goods or services for the personal use of employees are unallowable regardless of whether the cost is reported as taxable income to the employees.
Budget includes items primarily for employees' personal benefit (e.g., personal memberships, personal devices, gifts)
Housing costs (e.g., depreciation, maintenance, utilities, furnishings, rent), housing allowances, and personal living expenses for employees are allowable only as direct costs and must be approved in advance by the Federal agency — never as fringe or indirect costs.
Budget includes employee housing, housing allowances, or personal living expenses
Upload the funding notice and your draft budget or narrative, and ask. Grantable answers from its compliance database of federal, agency and state rules, with citations.
(a) Costs of goods or services for the personal use of the recipient's or subrecipient's employees are unallowable regardless of whether the cost is reported as taxable income to the employees.
(b) Housing costs (for example, depreciation, maintenance, utilities, furnishings, rent), housing allowances, and personal living expenses for the recipient's or subrecipient's employees are only allowable as direct costs and must be approved in advance by the Federal agency.
Source: eCFR · checked Sep 17, 2026
Costs of goods or services for the personal use of employees are unallowable regardless of whether the cost is reported as taxable income to the employees. Housing costs (e.g., depreciation, maintenance, utilities, furnishings, rent), housing allowances, and personal living expenses for employees are allowable only as direct costs and must be approved in advance by the Federal agency — never as fringe or indirect costs.
Budget includes items primarily for employees' personal benefit (e.g., personal memberships, personal devices, gifts). Budget includes employee housing, housing allowances, or personal living expenses.
Plain-English summaries for information only, not legal advice. Always check the regulation text, your award terms and your agency’s guidance.