R&D Tax Incentive calculator

Frequently asked questions

How much is the R&D Tax Incentive worth?

Companies with aggregated turnover under $20 million receive a refundable tax offset equal to their corporate tax rate plus 18.5 percentage points, which is 43.5% for a base rate entity. If the company is in tax loss, the offset is paid as a cash refund. Companies at or above $20 million receive a non-refundable offset of their tax rate plus 8.5 points on R&D intensity up to 2% of total expenses, and plus 16.5 points above that.

Who is eligible for the refundable 43.5% offset?

R&D entities (generally companies incorporated in Australia) with aggregated turnover under $20 million, at least $20,000 of eligible R&D expenditure, and registered core R&D activities with AusIndustry within 10 months of year end. Aggregated turnover includes connected and affiliated entities.

Is the R&D tax offset paid as cash?

Only the refundable offset (under $20 million turnover) converts to cash, and only to the extent the company has no tax payable to absorb it. A loss-making startup typically receives the full offset as a refund after lodging its company tax return. The non-refundable offset reduces tax payable, with unused amounts carried forward.

What expenditure counts as eligible R&D expenditure?

Notional deductions on registered core and supporting R&D activities: typically salaries and on-costs for time spent on R&D, contractor costs, direct costs, and a portion of overheads, plus decline in value of R&D assets. Expenditure is capped at $150 million per year, and amounts must generally be incurred to arm's-length parties for work in Australia unless an Overseas Finding applies.

When is the registration deadline?

R&D activities must be registered with AusIndustry within 10 months of the end of the income year. For a standard 30 June year end, that is 30 April of the following year. The tax offset is then claimed in the company tax return's R&D schedule.