SR&ED Calculator

Estimate your potential SR&ED return.

Eligible SR&ED Cost Breakdown

Labour Costs with Overhead Allowance

• Employee salaries and wages directly attributable to SR&ED work qualify at 100% of cost

• Must be Canadian T4ed employees

• Work outside Canada limit to 10% of claim

• Additional 55% proxy overhead allowance to cover estimated indirect costs like benefits, utilities, and administrative support

• Overhead allowance applies only to direct labour, not contractor costs

Materials and Equipment

• Materials consumed or transformed during SR&ED activities qualify at 100% of cost

• Includes raw materials, components, chemicals, and consumables used in experimentation

• Materials can source from anywhere

Contractor Costs

• External contractors qualify at 80% of their costs

• Contractors must perform eligible SR&ED activities

• Must be Canadian

• Subcontractor agreements should clearly define SR&ED scope

  
  

Federal SR&ED Tax Credit Rates

CCPC Enhanced Rate (35%)

• Canadian-controlled private corporations qualify for 35% federal credit

• Applies to first $3 million of qualified expenditures annually

• Fully refundable credit - receive money even without tax owing

• Subject to phases out above taxable capital limits ($10 million)

  
  

Basic Rate (15%)

• Large corporations and non-CCPCs receive 15% federal credit

• Applies to CCPC expenditures exceeding $3 million annual limit

• Non-refundable but can carry back 3 years or forward 20 years

Provincial Rates

• Vary from 8% to 30%

• Specific rules for calculation

• Grind down Federal credit