R&D Tax Incentive · Australia
The R&D Tax Incentive (R&DTI): How It Works
The R&D Tax Incentive (R&DTI) is Australia's main program for supporting business research and development. Eligible companies can receive a tax offset for conducting eligible R&D activities. It is jointly administered by AusIndustry and the ATO, and is self-assessed — so the responsibility for getting eligibility right sits with you. This guide covers who qualifies, what you can claim, the offset, the deadlines, and how a registered Research Service Provider fits in.
The R&DTI is one of several innovation support pathways a structured project may connect to. Whether it becomes relevant depends on your activities, your evidence and your own self-assessment — which is why readiness starts with how the project is framed and documented, not with the claim.
On this page: who is eligible · core vs supporting · is it experimental · what you can claim · the offset · how to claim & the deadline · how an RSP fits · explore by topic · FAQ
Who is eligible for the R&DTI?
Broadly, the R&DTI is for an R&D entity — generally a company incorporated in Australia and liable to income tax — that conducts at least one eligible core R&D activity. You normally need at least $20,000 of eligible R&D expenditure in the income year. The key exception: where total notional deductions fall below that threshold, expenditure paid to a registered Research Service Provider (RSP) forms the substituted base (see claiming under $20,000).
Core vs supporting R&D activities
Core R&D activities are experimental activities whose outcome cannot be known or determined in advance, carried out to generate new knowledge through a systematic progression — from hypothesis to experiment, observation and conclusion. Supporting R&D activities are activities directly related to core activities (for some, undertaken for the dominant purpose of supporting them). You must have at least one core activity. Commercial uncertainty is not technical uncertainty.
Is the work experimental? A self-check
The fastest first read of a project is not about dollars or tax — it is whether the work has the shape of an experiment at all. These three signals are a way to read your own project's structure. They are not a test of R&DTI eligibility.
A genuine unknown
When presentA competent professional could not have said the outcome in advance.
When absentThe result was already knowable — so the work is implementation, not an experiment.
A testable hypothesis
When presentAn explicit, falsifiable statement of what you expect — and what would show it is wrong.
When absentNo claim to test means there is nothing to investigate.
A systematic experiment
When presentVariables, controls and observations, recorded as the work happens.
When absentAd-hoc trial-and-error, without a record, is not a structured experiment.
Three “present” signals describe the shape of experimental work. They are a way to read your own project — not a checklist that makes anything eligible. The R&DTI is self-assessed against its own criteria, and only your specific activities determine eligibility. When the signals are absent, the work is more likely engineering or routine — still valuable, just a different kind of work.
What expenditure can you claim?
Eligible R&D expenditure can include salaries for staff on eligible activities, certain contractor costs, expenditure to a registered RSP, and other costs directly related to the R&D. Some expenditure is excluded — for example the cost to acquire or construct a building (relevant to property & construction), and software developed for a company's own internal administration. What you can claim depends on your circumstances.
The R&D tax offset
Under current law, companies with aggregated turnover under $20 million can receive a refundable tax offset (broadly the company tax rate plus an 18.5% premium — around 43.5% — which can be a cash refund). Larger companies receive a non-refundable offset at an intensity-based premium above the company tax rate. Rates and rules can change — confirm your position with a registered tax agent.
How to claim — and the 10-month deadline
- Self-assess your eligible core and supporting activities.
- Register with AusIndustry within 10 months of the end of your income year (for a 30 June year end, that is 30 April).
- Claim the offset in your company tax return — lodged by a registered tax agent — keeping contemporaneous records.
How a registered RSP fits
A registered Research Service Provider (RSP) conducts and structures your R&D on your behalf — and, where total notional deductions fall below $20,000, it is expenditure paid to a non-associate registered RSP that can still support a claim, so even small R&D projects can qualify. Ignition Research is a registered RSP (RSP000047). The RSP does the science and structuring; your registered tax agent prepares and lodges the claim. Learn more: what is an RSP, RSP vs R&D tax consultant.
Talk to a registered RSP about your R&DR&D Tax Incentive guides
Explore the R&D Tax Incentive by topic
- Claiming R&D under $20,000 — what counts toward the below-threshold base.
- Budget 2026: the proposed $50,000 threshold.
- R&D Tax Incentive by industry — software, construction, energy, food, fintech, legal tech.
- R&D Tax Incentive in Adelaide & South Australia.
- R&D insights — deeper explainers on eligibility, expenditure and findings.
Frequently asked questions
What is the R&D Tax Incentive?
The R&D Tax Incentive (R&DTI) is Australia’s main program supporting business research and development. It gives eligible companies a tax offset for conducting eligible R&D activities. It is jointly administered by AusIndustry (in the Department of Industry, Science and Resources) and the Australian Taxation Office, and is based on self-assessment.
Who is eligible for the R&D Tax Incentive?
Broadly, an R&D entity — generally a company incorporated in Australia (and some others) liable to pay income tax — that conducts at least one eligible core R&D activity. You normally need at least $20,000 of total notional R&D deductions in the year; below that, the offset is worked out on a narrower base — broadly, fees paid to a registered Research Service Provider (RSP) that is not your associate, for work in a field it is registered for, plus eligible CRC contributions. Eligibility is self-assessed.
What is the difference between core and supporting R&D activities?
Core R&D activities are experimental activities whose outcome cannot be known in advance and are carried out to generate new knowledge through a systematic progression of work (hypothesis, experiment, observation, conclusion). Supporting R&D activities are activities directly related to core activities (and, for some, undertaken for the dominant purpose of supporting them). You must have at least one core activity.
What expenditure can I claim under the R&D Tax Incentive?
Eligible R&D expenditure can include the salaries of staff on eligible activities, certain contractor costs, expenditure to a registered RSP, and other costs directly related to the R&D. Some expenditure is excluded (for example the cost to acquire or construct a building). What you can claim depends on your circumstances — confirm with a registered tax agent.
How much is the R&D tax offset?
Under current law, companies with aggregated turnover under $20 million can receive a refundable tax offset (broadly the company tax rate plus an 18.5% premium — around 43.5% — which can be a cash refund). Larger companies receive a non-refundable offset at an intensity-based premium above the company tax rate. Rates and rules can change; confirm your position with a registered tax agent.
How do I apply for the R&D Tax Incentive?
Self-assess your eligible activities, register them with AusIndustry within 10 months of the end of your income year, then claim the offset in your company tax return (lodged by a registered tax agent). Keep contemporaneous records of the R&D.
What is the R&D registration deadline?
You must register your R&D activities with AusIndustry within 10 months after the end of your income year. For a standard 30 June year end, that is 30 April. Late registration is only possible by requesting an extension in limited circumstances.
What is the difference between the R&D Tax Incentive and an R&D grant?
The R&DTI is an entitlement-based tax offset you self-assess and claim through your tax return for eligible R&D. Grants are competitive or program-specific funding you apply for upfront. They are different programs and can sometimes interact, so check the rules for each.
Can the ATO review or audit my R&D claim?
Yes. AusIndustry can review the eligibility of activities and the ATO can review expenditure. Both expect contemporaneous records — the hypothesis, experiments, results and costs kept at the time. Structuring the R&D and records up front is the best protection.
Is the R&D Tax Incentive changing?
The Government has announced (in the 2026-27 Budget) changes from 1 July 2028, including that businesses with R&D projects under $50,000 would work with recognised research organisations. The Government has not defined that term. These are announced, not yet law — current rules apply until then.
Sources
General information only — not tax, financial or legal advice. R&D Tax Incentive eligibility, thresholds and rates depend on your specific activities and circumstances and can change; eligibility is self-assessed. Always confirm current rules with the Australian Government (business.gov.au and ato.gov.au) or a registered tax agent. Last reviewed: June 2026.