The R&D tax offset is paid after two separate steps: AusIndustry registers your activities (due 10 months after year end, so 30 April 2027 for the year ended 30 June 2026), then the company tax return is lodged with the R&D tax incentive schedule quoting the registration number. Your accountant prepares the return and processes the R&D schedule as part of it, and the offset is paid through that lodgement.
Electronically lodged returns usually clear in a few weeks, but first-time claims, large offsets and returns selected for review can take several months. Only the refundable offset (aggregated turnover under $20M) is paid as cash, and only after the ATO applies it against tax payable and any existing tax debts.
The payment sequence, end to end
There is no single "R&D refund application". The money moves through a two-agency process, and each stage has to complete before the next can start.
- The income year ends (30 June for most companies).
- You register the R&D activities with AusIndustry through the R&D Tax Incentive customer portal. AusIndustry issues a registration number on acceptance.
- The company tax return is lodged with the R&D tax incentive schedule quoting that registration number. Your accountant prepares the return and processes the schedule as part of it.
- The ATO processes the return, applies the offset against tax payable and any existing debts, and pays the balance.
Activity eligibility is decided by Industry Innovation and Science Australia and its delegates at AusIndustry under Division 355 of the ITAA 1997. Expenditure and the offset itself are administered by the ATO.
Those are two different agencies with two different queues, which is why the elapsed time is longer than most founders expect.
How long does the R&D tax refund take?
Realistically, three to six months from the end of the income year for a company that registers promptly and lodges immediately after. Registration processing plus tax return processing are the two variable stages. The table below sets out typical timings for a straightforward claim.
| Stage | Who | Typical elapsed time |
|---|---|---|
| Prepare registration (activities, evidence, narratives) | Company | 1 to 4 weeks |
| AusIndustry registration processed, number issued | AusIndustry | Days to several weeks |
| Company tax return prepared and lodged with the R&D schedule | Your accountant | 1 to 3 weeks |
| ATO processing of an electronically lodged return | ATO | Commonly a few weeks |
| Payment to nominated bank account | ATO | Days after assessment issues |
Anything that triggers a question at either agency resets the clock. A first-time claim, an unusually large offset relative to turnover, or an inconsistency between the registration and the schedule can push processing out by months.
Step 1: Register with AusIndustry
Registration must precede claiming the offset, and the deadline is statutory: 10 months after the end of the income year. For the year ended 30 June 2026, that is 30 April 2027, confirmed on business.gov.au. Registration for the 2026 income year is already open, so nothing stops you registering months ahead of that date.
The registration form requires substantial narrative fields with character minimums for each core activity, covering the hypothesis, the experiment, how results were evaluated and the new knowledge produced. Under-drafted fields are the most common cause of a registration going back and forth, and each round trip is time your refund is not being processed.
Our portal guide and registration deadline explainer cover the field-by-field mechanics.
Step 2: Lodge the company tax return and R&D schedule
There is no separate refund claim. The offset is claimed in the company tax return, supported by the R&D tax incentive schedule, and paid through the lodgement of that return. Your accountant prepares the return and processes the R&D schedule with it, and the AusIndustry registration number goes on the schedule. Without that number, there is nothing to claim against.
Company return due dates fall after the registration deadline. For the 2026 income year, 15 May 2027 is the common due date when lodging through an accountant, against a 30 April 2027 registration deadline. That ordering is deliberate: register, then lodge.
You can lodge earlier. Nothing stops a company registering in August 2026 and lodging in September 2026, and for a loss-making startup that is usually the single biggest cash-flow lever available.
Step 3: ATO processing and payment
Once the return is lodged, the ATO assesses it, applies the offset in the order the law requires, and pays any remaining refundable amount to your nominated bank account. The account details must be current in the ATO's records or payment stalls.
Refundable offsets attract scrutiny because they generate cash rather than reduce tax. Expect the ATO to check:
- That the AusIndustry registration number is valid and matches the claiming entity
- That the expenditure claimed is consistent with the registered activities
- That the claim clears the $20,000 minimum notional R&D deduction threshold, waived only for payments to a Registered Research Service Provider or monetary contributions under the Cooperative Research Centre program
Worked timeline for a 30 June year end
Two companies, same income year, very different cash dates.
| Milestone | Fast lodger | Deadline lodger |
|---|---|---|
| Year end | 30 June 2026 | 30 June 2026 |
| Registration submitted | Early August 2026 | Late April 2027 |
| Registration number issued | Late August 2026 | May 2027 |
| Tax return with R&D schedule lodged | September 2026 | Mid-May 2027 |
| Refund typically received | October 2026 | Mid-2027 or later |
The gap is roughly eight months on the same underlying claim. Full date coverage sits in our deadlines guide.
Only the refundable offset pays cash
Whether you get cash at all depends on aggregated turnover. Below $20M the offset is refundable at the company tax rate plus 18.5 percentage points, commonly 43.5% for a base-rate entity taxed at 25%. At $20M or more, the offset is non-refundable and cannot be paid out.
The 2026-27 Federal Budget proposed lifting this threshold from 1 July 2028, but that measure is not yet law and does not affect the 2026 income year. Our Budget explainer covers what was announced.
Worked example: refundable, loss-making company
A base-rate entity with aggregated turnover of $4M has $800,000 of eligible notional R&D deductions and no tax payable.
- Offset: $800,000 × 43.5% = $348,000
- Tax payable: nil
- Cash refund: $348,000
Worked example: refundable, profitable company
Same offset of $348,000, but the company has $60,000 of income tax payable (calculated without deducting the R&D expenditure, which is claimed through the offset instead). The offset first extinguishes the $60,000 liability, then $288,000 is paid as cash.
Worked example: non-refundable
A company with aggregated turnover of $60M, total expenditure of $25M and notional R&D of $2M pays tax at 30%. The premium is applied marginally across two tiers.
- Intensity: $2M notional R&D / $25M total expenditure = 8%
- First tier: $500,000 (2% of total expenditure) × 38.5% = $192,500
- Second tier: $1,500,000 × 46.5% = $697,500
- Total offset: $890,000, none of it cash. It reduces tax payable and any excess carries forward.
Note the expenditure cap as well: notional R&D deductions above $150M in an income year attract the offset at the company tax rate only, with no premium. Our calculation walkthrough works through the arithmetic in more detail.
What delays your refund
Most delays are self-inflicted and predictable. Three causes account for the majority.
ATO reviews and information requests
The ATO can review a claim before or after issuing the refund. Pre-issue checks hold payment while questions are answered. Post-issue reviews pay first and ask later, with the risk of an amended assessment.
Requests usually target the link between claimed expenditure and registered activities:
- Timesheets or time logs supporting salary apportionment
- Contractor agreements
- Evidence that associate payments were paid in cash by year end, not merely accrued
Weak contemporaneous evidence is what turns a two-week question into a three-month one. See what triggers an ATO review.
Registration problems and amendments
If AusIndustry queries an activity, asks for clarification, or you need to amend a registration after lodging (for example, because an activity was misclassified as core when it belongs in a supporting activity), the schedule may need amending too. An amended return goes back to the start of the processing queue.
The exclusions in s 355-25(2) are a frequent trigger. Software developed for the dominant purpose of the entity's own internal administration is excluded under paragraph (h), and activities undertaken to show compliance with a standard fall under paragraph (f). Getting these categorised correctly before submission is faster than fixing them after.
Existing tax debts
The ATO applies a refundable offset against outstanding liabilities before paying anything out. GST, PAYG withholding, superannuation guarantee charge and prior-year income tax all absorb the refund first, including debts sitting under a payment arrangement or deferral.
Founders modelling the offset as clean runway are often surprised by this. Reconcile your ATO integrated client account before you lodge.
Can you get the money sooner?
Partly. You cannot compress ATO processing, but you control when the clock starts.
Lodge early rather than at the deadline
The offset is an annual entitlement claimed in the return for the relevant income year. Registering in July or August and lodging as soon as the accounts are finalised is the only lever inside the program itself, and it typically moves cash forward by six to eight months compared with lodging at the deadline. For the 2026 income year that window is open now.
This is where slow preparation costs money. Rand builds the registration from engineering and clinical evidence already in your systems, so the narrative fields are drafted to their AusIndustry minimums while the year is fresh rather than reconstructed nine months later.
There is no quarterly payment
The R&D tax offset is not paid quarterly. It is claimed once per income year through the company tax return, so a company with a 30 June year end has one payment event per year, not four.
R&D-backed lending
Some lenders advance funds against an expected refundable offset, discounting for risk and time. This is commercial finance, not part of the program, and the cost of the advance has to be weighed against the certainty of the claim.
Lending against an unregistered or fragile claim compounds the risk if the activities are later found ineligible.
Before you count on the cash
Two things determine the date the money lands: how quickly you register, and how well the claim holds up under questions. Both are prepared work, not luck.
If you want the registration and expenditure schedule ready to lodge in weeks rather than months, Rand assembles both from your existing engineering and clinical evidence, with Expert Reviewers approving the AusIndustry registration before it goes in. Start with the complete guide and what expenditure you can claim. This article explains the rules and is not tax advice for your circumstances.