In project management, what are direct costs?

Direct costs are expenses that can be directly attributed to a specific project activity or task. They include items such as salaries for the team working on the project, materials specifically procured for the project, and any resources that are dedicated solely to that project. Since these costs are clearly associated with the project, tracking them can provide valuable insights into the project's budget and resource allocation.

This concept contrasts with other types of costs, such as indirect costs, which cannot be easily linked to a single project and are often spread across multiple projects or the organization as a whole. By accurately identifying and managing direct costs, project managers can improve financial oversight and ensure that funds are allocated efficiently toward achieving project objectives.