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Topic hub: Eligibility

R&D Tax Incentive eligibility: what qualifies

A company qualifies for the R&D Tax Incentive when it is an R&D entity, spends at least $20,000 on R&D, and conducts at least one core R&D activity: experimental work whose outcome a competent professional could not know in advance, run as a systematic progression of work to generate new knowledge. Eligibility is assessed activity by activity.

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  1. Research and Development Tax Incentive: How It WorksWhat the R&D Tax Incentive is, who can claim, current offset rates, which activities and costs qualify, and how to register before the 30 April deadline.14 min read
  2. R&D Tax Incentive Eligibility: The Complete TestWho qualifies for the R&D Tax Incentive: company eligibility, the $20,000 minimum spend, the s 355-25 core activity test, exclusions and offset rates.12 min read
  3. Core vs supporting R&D activities, and why it now matters moreCore and supporting R&D activities are treated differently under Division 355, and the 2028 reforms widen the gap. How to tell them apart and classify correctly.4 min read
  4. What R&D Expenditure Can You Claim in Australia?Salaries, contractors, associates, overheads and depreciation: which costs qualify under Division 355, how to apportion them, and what is excluded.12 min read

All eligibility guides

Eligibility by sector

More eligibility guides

Tools and references

R&D Tax Incentive calculatorEstimate the refundable or non-refundable offset on your R&D spend.3-minute eligibility checkA quick read on whether your work looks like R&D, no signup needed.R&D Tax Incentive for SaaS companiesWhere the eligible work sits in a software product business.R&D Tax Incentive for health-techTechnical and clinical uncertainty in digital health.Division 355 glossaryPlain-English definitions of every term of art in the program.

Frequently asked questions

What is a core R&D activity?
Under section 355-25 of the Income Tax Assessment Act 1997, a core R&D activity is experimental work whose outcome cannot be known or determined in advance from current knowledge, and can only be found by a systematic progression of work from hypothesis to experiment, observation, evaluation and logical conclusions. It must also be conducted for the purpose of generating new knowledge.
Can supporting activities be claimed?
Yes, under the current rules. A supporting R&D activity must be directly related to a registered core activity. If it produces goods or services, is directly related to producing them, or falls in an excluded category, it only counts when its dominant purpose is supporting the core R&D. The 2026-27 Budget proposed removing supporting activities from 1 July 2028, which is not yet law.
Is software development eligible?
Some of it. Routine feature delivery, integration of known tools and software built mainly for the company's own internal administration are not core R&D. The eligible slice is work where a competent software professional could not know in advance whether an approach would achieve a technical goal, resolved by structured experiments and recorded as the work happened.
Does the work have to be new to the world?
The uncertainty has to be genuine against knowledge that is publicly available or reasonably accessible anywhere in the world, not just new to your company. If a competent professional could have worked out the answer from existing literature, documentation or prior solutions, the activity is not a core R&D activity, however hard it was for your own team.

The R&D Tax Incentive is a self-assessment program. This page is general information, not tax, legal, or financial advice; eligibility depends on your specific circumstances and you should seek independent advice for them.