R&D Tax Incentive · Policy update
Budget 2026: the Proposed $50,000 R&D Threshold, Explained
In the 2026-27 Budget, the Government announced a proposal to raise the R&D Tax Incentive's minimum expenditure threshold from $20,000 to $50,000, intended to apply to income years starting on or after 1 July 2028. Under the proposal, R&D below the threshold would need to be conducted through a Registered Research Service Provider (RSP) or Cooperative Research Centre (CRC) to qualify. This is announced, not yet law — the current $20,000 rule applies until then. What is an RSP?
On this page: what was announced · current vs proposed · why the RSP route matters · what to do now · FAQ
What was announced
The measure, as announced in the 2026-27 Budget, would lift the minimum R&D expenditure threshold to $50,000 and require below-threshold R&D to be conducted through an RSP or CRC. The Department of Industry, Science and Resources has indicated the changes are intended for income years starting on or after 1 July 2028.
Status: this is an announced proposal, not enacted law. Detail and timing can change as it moves through the legislative process. Do not treat the figures below as current rules — confirm the law in force with the Australian Government or a registered tax agent.
Current law vs the announced proposal
| Topic | Current law | Announced, from 1 July 2028 |
|---|---|---|
| Minimum R&D expenditure threshold | $20,000 | $50,000 (proposed) |
| Below-threshold pathway | RSP route available (RSP spend is threshold-exempt) | RSP or CRC required for below-threshold R&D (proposed) |
| Eligibility | Self-assessed | Still self-assessed, subject to future legislation/guidance |
| Claim support | Through your accountant / registered tax agent | Same, unless future rules change |
Figures and dates reflect what was announced and may change. This page does not state future offset rates, which were not settled at the time of writing.
Why the proposed reform makes the RSP route matter more
Expenditure to a registered RSP is already exempt from the current $20,000 minimum-spend threshold. If the threshold rises to $50,000 and below-threshold R&D must run through an RSP or CRC, the RSP route would become the main way smaller R&D budgets keep accessing the incentive.
In practice, that means more start-ups and SMEs with modest R&D spend may need a registered RSP to conduct their research. See claiming R&D under the threshold and RSP vs R&D tax consultant.
What small R&D claimants should do now
- Keep claiming under current rules. The $20,000 threshold (and its RSP exemption) applies until any change takes effect.
- Plan the RSP pathway. If your R&D budget is modest, routing eligible work through a registered RSP positions you for both the current rules and the proposed reform.
- Confirm with a registered tax agent. Eligibility is self-assessed and the policy is not yet law — get your specific position confirmed.
How Ignition Research fits
Ignition Research is a Registered Research Service Provider (RSP000047), recognised by AusIndustry / the Department of Industry, Science and Resources, based in Adelaide at Lot Fourteen. We conduct and structure eligible R&D for Australian companies — the pathway that keeps below-threshold projects claimable now, and the one the announced reform would lean on from 2028. Verify our registration on the public RSP register.
Get a 2028 R&DTI readiness reviewFrequently asked questions
What did the 2026-27 Budget announce for the R&D Tax Incentive?
The Government announced a proposal to raise the minimum R&D expenditure threshold from $20,000 to $50,000, intended to apply to income years starting on or after 1 July 2028, with below-threshold R&D needing to be conducted through a Research Service Provider (RSP) or Cooperative Research Centre (CRC). These are announced proposals, not yet legislated; the current rules continue to apply until then.
When would the $50,000 threshold start?
As announced, the change is intended to apply to income years starting on or after 1 July 2028. Until then, the current $20,000 minimum-spend rule applies. Timing and detail can change as the measure moves through the legislative process.
Why does the reform make the RSP route more important?
Under the announced proposal, R&D below the $50,000 threshold would need to be conducted through an RSP or CRC to qualify. Because expenditure to a registered RSP is already exempt from the minimum-spend threshold, the RSP route would become the main pathway for smaller R&D budgets to keep accessing the incentive.
Is the $50,000 threshold law yet?
No. It is an announced proposal from the 2026-27 Budget, not yet enacted legislation. You should not treat it as a current rule. Confirm the current law and any enacted changes with the Australian Government or a registered tax agent before relying on them.
What should small R&D claimants do now?
Continue under the current $20,000 rules, and plan ahead: if the reform proceeds, routing eligible R&D through a registered RSP would let below-threshold projects keep qualifying. Eligibility is always self-assessed, and your tax position should be confirmed with a registered tax agent.
Is Ignition Research a registered RSP?
Yes — Ignition Research is a Registered Research Service Provider (RSP000047), recognised by AusIndustry / the Department of Industry, Science and Resources. You can verify the current registration on the public RSP register at business.gov.au.
Sources
General information only — not tax, financial or legal advice. The reform described here was announced in the 2026-27 Budget and is not yet law; details, figures and timing may change. R&D Tax Incentive eligibility, thresholds and rates depend on your circumstances. Always confirm the current law and any enacted changes with the Australian Government (business.gov.au, industry.gov.au and ato.gov.au) or a registered tax agent. Last reviewed: June 2026.