Direct Costs
EVM Terms
Reviewed by forProject Technology - updated Sep 2026
Quick definition: Direct Costs are costs that can be specifically identified with a particular contract or project and are charged to it directly — for example materials, labor, subcontractor charges, or other direct costs such as travel.
Unlike Indirect Costs, which are shared across multiple contracts or the business as a whole, Direct Costs are traceable to one specific cost objective. Material purchased for a contract, or the wages of employees working directly on it, are common examples. Direct and indirect costs together make up the Elements of Cost.
What this means for you
Direct costs usually represent the types of cost directly under the control of the project team — labor hours, material costs, subcontractor costs, travel, and other direct costs (ODCs). Exercising control over these costs is an important part of managing the project.
Also known as
N/A
Used in
Elements of Cost; Control Account Plan development
FAQ
What's a simple example of a Direct Cost?
Material purchased specifically for a contract, or the wages of an employee working directly on that contract, are both classic examples.
Definition maintained by forProject Technology.
© 2026 forProject Technology, Inc.
© 2026 forProject Technology, Inc.
