ZIM subsidises market-oriented research and development projects at mid-sized companies. Exactly which costs are eligible decides how large the grant actually paid out turns out to be.
Overview: what ZIM funds
ZIM funds five categories of cost: staff costs, overheads via a flat rate, external services, project-related material and travel costs, and pro rata depreciation on capital goods[1]. All costs have to be directly attributable to the approved R&D project and evidenced in the statement of use. Depending on company size, region and project type, the funding rate is between 25 and 55 per cent of eligible costs.
Staff costs
Staff costs for R&D personnel form the central assessment base in ZIM. What counts is the actual gross wage cost including the employer's social security contributions for the hours worked directly on the project. Time records per employee are mandatory.
Important: only employees with a clearly defined R&D role in the project may be included. Purely administrative, sales or production work is not eligible. That distinction has to be consistent between the application and the internal time records.
The overhead flat rate
The overhead flat rate is 120% of staff costs. For SMEs with fewer than 50 employees it replaces the laborious itemised evidence of project-related overheads such as rent, IT infrastructure, energy and similar indirect costs[1]. The flat rate was introduced with the reform on 1 January 2025 and simplifies the application and evidence logic considerably.
For a company with €100,000 in eligible staff costs, the flat rate adds a further €120,000 to the assessment base, giving €220,000 in total to which the funding rate is applied. Companies with more than 50 employees can continue to claim actual overheads with itemised evidence, if the administrative effort is justified.
External services and contract research
External services from third parties — contract research at institutes, specialist prototyping or preliminary certification work — are eligible up to 35% of direct staff costs[2]. That limit relates exclusively to direct staff costs, not to the total assessment base including the flat rate.
Every external service has to make an independent, documented research contribution. Pure contract manufacturing, routine services or services with no recognisable R&D element are not eligible. That substantive distinction has to be described in the application and remain traceable later in the statement of use.
In cooperation projects with research institutions, separate rules apply to the research partner: research institutions are funded at 100% of their non-economic costs and are therefore independent grant recipients, not part of the company's external services budget.
Material and travel costs
Project-related material costs — consumables, test samples, laboratory supplies — are eligible provided they are used directly and exclusively on the R&D project. Evidence of the project-specific purpose is needed; general operating supplies don't count.
Travel costs are eligible where the trip serves the project directly: project meetings with cooperation partners, trade fair visits with a direct R&D link, or business travel to test sites. Blanket or non-project-specific travel is regularly challenged during assessment.
Depreciation on capital goods
The full purchase price of a machine or piece of equipment is not eligible. Only the project-related depreciation for the duration of the project counts[1]. If a piece of equipment is used 60% for the ZIM project and 40% for other purposes, 60% of the annual depreciation is claimable pro rata over the project period. Capital goods acquired exclusively for the project can be fully depreciated over the project period.
Purchase receipts, depreciation schedules and a statement on the project usage share belong in the statement of use documentation. Anyone compiling that documentation only retrospectively risks reductions at the final audit.
Costs that are not eligible
Some cost items are regularly claimed in ZIM but are not eligible in principle:
- Sales and marketing — costs for market launch, sales activity or advertising the product developed in the project are not part of the R&D phase.
- Routine development and production ramp-up — adaptations without technological risk, series production or mere product improvements without an R&D character are excluded.
- General operating costs — rent, electricity and administration outside the overhead flat rate: these are covered only by the flat rate and cannot be claimed separately on top.
- Interest and financing costs — credit costs for pre-financing your own share are not part of the eligible costs.
There is also this: costs incurred before the application arrived disqualify the project entirely[1]. Even conceptual work, studies or engaging partners before the application arrives count as an early project start on a strict reading.
Cumulation with the Forschungszulage
ZIM and the Forschungszulage under the FZulG can be used in parallel, but not on the same costs. The ban on cumulation in the GBER (Art. 8) and § 7 FZulG prohibits funding the same expenditure twice[3]. Anyone claiming staff costs for employee A in ZIM may no longer claim the Forschungszulage for exactly those hours.
In practice that means a clear cost separation in the accounts: the ZIM project and the Forschungszulage project have to be documented separately at the level of individual employees and time shares. Cleaning that up after an audit is laborious and regularly leads to clawback.
FAQ
What costs are eligible under ZIM? Eligible are staff costs for R&D personnel, the overhead flat rate (120% of staff costs), project-related external services up to 35% of direct staff costs, material and travel costs, and pro rata depreciation on capital goods used for the project.
How high is the ZIM overhead flat rate? The flat rate is 120% of staff costs and replaces itemised evidence for SMEs with fewer than 50 employees. It was introduced with the guideline reform on 1 January 2025.
Up to what share can external services be claimed? Up to 35% of direct staff costs. The limit applies to direct staff costs, not to the total assessment base. External services need a demonstrable research contribution.
Can I combine ZIM and the Forschungszulage for the same staff costs? No. The same person-hour may only be funded once. Both programmes can run in parallel, but for clearly separated time shares and cost types.
Are investments in machinery eligible under ZIM? Only the project-related depreciation, not the purchase price. The pro rata depreciation for the project period feeds into the assessment base, provided the equipment is demonstrably used mainly on the R&D project.
ZIM funding: application, eligibility, process
Single, cooperation and network projects, rates between 25 and 45 per cent, applications all year round: an overview of ZIM funding.
ZIM funding rate: what percentage you get, by company size
Whether 25, 35 or 45 per cent: the ZIM funding rate depends on your company size, the project type and your location. Here is what you get, and why.
ZIM eligibility in 2026: what you have to meet
Anyone applying for ZIM has to meet five core requirements, from the SME definition to technological risk. This article explains each one.
Filing a ZIM application: the process step by step
No fixed deadline, two project management agencies, one clearly defined process: how to submit a ZIM application properly, from pre-check to statement of use.
All the detail, eligibility and pitfalls:
- [1]Guideline "Zentrales Innovationsprogramm Mittelstand (ZIM)" — consolidated PDF version— Federal Ministry for Economic Affairs and Climate Action (BMWK), 2024 Source
- [2]ZIM guideline 2025 — publication page with full text and key content— BMWE / ZIM (zim.de), 2025 Source
- [3]Regulation (EU) No 651/2014 (General Block Exemption Regulation, GBER), Article 25 — aid for research and development projects— European Commission, EUR-Lex, 2014 Source
- [4]Guideline "Zentrales Innovationsprogramm Mittelstand (ZIM) — R&D funding", Bundesanzeiger AT 11.12.2024 B1— Bundesanzeiger Verlag / BMWK, 2024 Source