Horizon Europe Lump Sum Funding: How It Works, How to Budget, and How You Get Paid

The Short Answer

Under lump sum funding, the EU pays you a fixed amount per work package instead of reimbursing your actual costs. You still build a detailed budget to justify the amount, but once it is fixed in the grant agreement you never report actual costs again — no timesheets, no payslips, no invoices, and no financial audits. Payment is triggered by completing a work package, not by spending money.

Question	Answer
What triggers payment?	Completion of a work package — not a successful scientific outcome
Do I still need a budget table?	Yes, for Type 2. A detailed Excel table, submitted as an annex to Part B
Do I report actual costs?	No. Ever.
Do I keep timesheets?	Not for the grant. National/internal obligations still apply
Are there financial audits?	No financial checks, reviews or audits by the Commission
Page limit for Part B	45 pages for RIA/IA (vs 40 standard); 28 pages for CSA (vs 25)
Indirect costs	Still the 25% flat rate, applied inside the budget table

If you have ever spent a fortnight reconciling productive hours across eight partners, that table is the entire argument for lump sum funding.

Sources used throughout:

• Lump sum funding: what do I need to know? (V3.0, 24 June 2024)
• Horizon Europe Work Programme 2026-2027 — General Annexes
• Decision authorising the use of lump sum contributions under Horizon Europe
• Guidance: How to manage your lump sum grants

Why the Commission Introduced It

The Commission's own reasoning is blunt: "Despite all simplification, funding based on reimbursement of incurred costs remains complex and error-prone."

Actual-cost grants generate a large amount of work that has nothing to do with research — hourly rate calculations, productive hours, depreciation schedules, and the audit exposure that follows all of it. Lump sum funding removes that layer entirely. The Commission gives two stated goals: a major reduction in administrative burden, and easier access to the programme, especially for small organisations and newcomers.

There is one reassurance worth quoting directly, because applicants routinely assume the opposite:

"No intention and nor basis for judging the performance of lump sum grants more strictly than the performance of other grants."

Lump sum is not a stricter regime. It is the same regime with the financial reporting removed.

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Type 1 and Type 2: Which One Are You Applying To?

There are two variants, and the topic text tells you which one applies — you do not choose.

	Type 1	Type 2
Who sets the amount	Fixed in the call for proposals	You define it in your proposal
Detailed budget table	Generally not required	Required
Your budgeting task	Fit the work to the amount	Justify the amount you request

For Type 1 the total is given, and your job is to design a credible work plan that fits it. For Type 2 — the more common case for collaborative topics — you propose the amount, and the detailed budget table is what justifies it.

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The Detailed Budget Table

For Type 2 proposals, this table is the heart of the application. It is an Excel file (.xlsm, macro-enabled) that you download from the online submission system, complete, and upload as an annex to Part B.

A detail that catches people every year: you must work in .xlsm but upload in .xlsx or .xls. For security reasons the submission system will not accept .xlsm. Always keep the original macro-enabled copy.

What the estimates must satisfy

Your cost estimations are not free-form. They:

• must be in line with your normal practices
• must be reasonable and not excessive
• must be in line with the activities proposed
• are subject to the same eligibility rules as actual-cost grants — a cost can appear only if it would have been eligible in a normal grant

That last point is the one that carries real risk. The General Annexes are explicit: "If the budget table contains ineligible costs, the grant may be reduced (even later on during implementation of the project or after its end)." The absence of financial audits does not make ineligible costs safe.

How it is structured

You enter costs per beneficiary, per work package, per cost category. In the personnel section, one item = one person-month. The table then generates the lump sum breakdown automatically, applying the funding rate you selected for each participant.

Two thresholds worth remembering:

• If purchase costs exceed 15% of a beneficiary's personnel costs, that beneficiary must complete table 3.1h in Part B.
• Depreciation costs are calculated in their own tab but are not transferred automatically — you must copy them into the beneficiary tab by hand.

The personnel cost dashboard

This is the least-known part of the process and it directly affects your score.

Evaluators are instructed to use the Horizon dashboard for lump sum evaluations as an orientation tool. For each combination of country and organisation type, it shows the distribution of monthly personnel costs between the 20th and 80th percentile, based on grants already signed under Horizon Europe.

If your personnel costs sit above that band, they are not automatically wrong — but you must justify them in the 'Any comments' tab of the Excel file. An unexplained figure above the dashboard range is an invitation for the evaluators to cut your budget.

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Designing Work Packages for Payment

Under lump sum funding the work package stops being an organisational convenience and becomes the unit of payment. That changes how you should design them.

The Commission is specific about what does not qualify:

• A single activity is not a work package
• A single task is not a work package
• A percentage of progress is not a work package (e.g. "50% of the tests")
• A lapse of time is generally not a work package (e.g. "activities of year 1")

The guidance is to have "as many as needed but no more than what is manageable."

The splitting technique

Here is the practical trick that materially improves your cash flow, and it is recommended in the official guidance itself.

A work package that runs the entire project — project management, dissemination, exploitation — will not be complete until the very end. Under lump sum rules, that means its entire share is paid only at the final payment.

The fix is to split long-running work packages along reporting period boundaries: WP1 Management (RP1), WP2 Management (RP2), WP3 Management (RP3). Each becomes payable at its own interim payment. You do not even need to repeat the description for each split work package in table 3.1b.

A four-year project with a single 48-month management work package defers that money for four years. The same project with three split management work packages collects it as it goes.

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How Your Budget Is Evaluated

Lump sum proposals are evaluated against the standard criteria — Excellence, Impact, and Quality and efficiency of the implementation — with the same scoring and the same thresholds as any other proposal. There is no separate financial gate.

The cost estimations are assessed under the implementation criterion. Experts check that the estimates are reasonable and non-excessive, and that the split of the lump sum actually allows the described activities to be completed.

What happens next depends on how bad the problem is, and the distinction matters a great deal:

Finding	Consequence
Costs overestimated	Concrete budget recommendations recorded in the ESR → reduced lump sum, but the score is not decreased
Budget unfit for purpose, or strongly overestimated	Score decreased under the implementation criterion

So a modest overestimate costs you money. A budget that does not correspond to the work costs you the proposal.

One asymmetry to note for the Evaluation Summary Report: comments on the budget table are provided only for proposals invited to grant preparation, placed on the reserve list, or rejected due to significant over- or underestimation of costs. If you are rejected on quality, do not expect budget feedback.

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Getting Paid

The payment structure is the same shape as any Horizon Europe grant, with one difference in what triggers each payment.

Payment	What it covers
Pre-financing	Same function and rules as other grants; the coordinator distributes it per the consortium agreement
Interim payment(s)	The lump sum shares for work packages completed and approved in that reporting period
Payment of the balance	Closes the grant; partially completed work packages can be paid; releases the Mutual Insurance Mechanism retention

The coordinator declares each work package as Completed or Not Completed, justified by the technical periodic report. The financial statement is then generated automatically from the accepted work packages.

Three rules that protect you more than most applicants realise:

1. Completion is about activities, not outcomes. A work package is accepted if the activities were carried out. Negative scientific results do not block payment.
2. Near-completion still counts. Work packages can be accepted when all essential tasks are done, when equivalent tasks were carried out, or when deviations are justified.
3. An incomplete work package is not lost. It can be completed and paid in a subsequent reporting period. And before a work package you declared complete is rejected, you are invited to respond to the project officer's observations.

Only at the final reporting period can you declare work packages as Partially Completed with a percentage — and if a work package genuinely cannot be finished, the share is paid partially in line with the degree of completion, decided case by case.

Moving money around

Because the actual distribution of the lump sum is invisible to the Commission, you can use the budget as you see fit as long as the project is implemented as agreed. Transfers between work packages need an amendment only if you want them reflected in the grant agreement, and are possible provided the work packages concerned are not already completed and declared, and the transfer is justified by the technical and scientific implementation.

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What You Keep, and What You Can Throw Away

This is the part that changes daily life on a project.

You still need	You no longer need
Technical documents, deliverables, prototypes	Timesheets
Publications	Payslips and employment contracts
Lab books and records required by good research practice	Depreciation policy
Any document proving the work was done as described in Annex 1	Invoices

Ex-post controls still happen — but only on proper implementation and non-financial obligations: IPR, ethics and integrity, open science, dissemination. There are no financial checks, reviews or audits by the European Commission.

One caveat that is easy to misread: this describes your obligations under the grant agreement. Record-keeping duties imposed by national law or your own institution's procedures are unaffected.

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Practical Consequences for Your Proposal

Budget realism is now a scoring issue, not just a finance issue. In an actual-cost grant, an optimistic budget gets corrected during implementation. In a lump sum grant it is fixed forever, and a badly wrong one costs you points under implementation.

Once fixed, the amount is final. The guidance is explicit that the lump sum "will not be questioned if the prices for goods or services change later on." That protects you against inflation on purchases — and equally means you carry the risk if your own costs run high.

The 'no negotiation' principle still applies. The grant agreement is prepared on the basis of the proposal you submitted. Only obvious errors, compliance-driven changes, and the adjustment to the amount in the Evaluation Result Letter are permitted.

Know your partners' funding rates. In the beneficiary list you select a funding rate per participant. RIA and CSA topics are 100%; IA topics are 70%, except for non-profit legal entities where 100% applies. A mis-set rate silently changes what everyone receives. Our guide to Horizon Europe funding rates covers how these are set and the exceptions that apply.

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Frequently Asked Questions

Is lump sum funding harder to win than an actual-cost grant?

No. The Commission states there is "no intention and nor basis for judging the performance of lump sum grants more strictly than the performance of other grants." The evaluation criteria, thresholds and scoring are identical. Only the financial reporting differs.

Do I still have to submit a budget if the lump sum is fixed in the call?

Generally no. A detailed budget table is required for Type 2 proposals, where you define the amount. For Type 1 the amount is set in the call. The Decision authorising lump sum funding for a specific action may exceptionally waive the table entirely.

What happens if we cannot complete a work package?

It can be completed and paid in a later reporting period. If it cannot be finished by the end of the project — for technical reasons or force majeure — the share is paid partially in line with the degree of completion, decided case by case, and you can provide observations before the decision.

Do we still need timesheets on a lump sum project?

Not for the grant. Timesheets, payslips, invoices and depreciation policies are not required to justify a lump sum payment. You must still comply with any record-keeping obligations under national law or your own internal procedures.

Are lump sum grants audited?

Not financially. The Commission carries out no financial checks, reviews or audits. Ex-post controls still cover proper implementation and non-financial obligations such as IPR, ethics, open science and dissemination.

How many pages does a lump sum proposal get?

45 pages for Research and Innovation Actions and Innovation Actions, against 40 for standard topics. Coordination and Support Actions get 28 pages against 25. The extra allowance sits in section 3.1, which expands from 12 to 17 indicative pages.

Can we move budget between partners after the grant is signed?

Yes, within limits. The actual distribution of the lump sum is invisible to the Commission, so you can use it as you see fit provided the project is implemented as agreed. Transfers between work packages need an amendment to be reflected in the grant agreement, and the work packages concerned must not already be completed and declared.

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Summary

• Lump sum funding pays a fixed amount per work package on completion of activities, not on costs incurred.
• Type 1 fixes the amount in the call; Type 2 requires you to justify it with a detailed Excel budget table.
• Cost estimates must still satisfy normal Horizon Europe eligibility rules — ineligible costs can reduce the grant even after the project ends.
• Evaluators check your budget under the implementation criterion, using the Horizon dashboard's 20th–80th percentile band for personnel costs. Justify anything above it.
• Split long-running work packages along reporting periods so they can be paid at interim payments rather than at the end.
• Completion is judged on activities, not outcomes, and incomplete work packages can be paid later.
• No timesheets, no invoices, no financial audits — but technical evidence and non-financial compliance still matter.

Lump sum funding does not make a weak proposal fundable. It removes the financial machinery that never had anything to do with whether your research was good — which is the point.

Last updated: August 2026.