Everything you need to understand the program — who qualifies, what you can claim, how the offset works, and the mistakes that cost companies thousands.
The Research and Development Tax Incentive is an Australian Government program that gives companies a cash offset for eligible R&D activities. If you’re doing genuinely innovative work — where the outcome isn’t certain in advance — the government gives you back a percentage of what you spent on that work.
It’s not a grant. It’s not competitive. It’s a tax incentive available to any eligible company, and unlike grants, there’s no pool of money that runs out. If you qualify, you claim it.
The program is jointly administered by AusIndustry (who assess the R&D activities) and the ATO (who process the offset as part of your tax return).
The amount depends on your aggregated turnover. There are two tiers.
43.5% refundable offset. Since you’d normally deduct R&D at your 25% tax rate, the net benefit is 18.5 cents for every dollar spent on eligible R&D. And it’s refundable — you get it as cash even in a loss year.
38.5% non-refundable offset. Net benefit of 8.5 cents per dollar above the 30% corporate rate. Reduces your tax liability; any excess carries forward.
A SaaS startup with $400,000 in eligible R&D spend and under $20M turnover gets back roughly $74,000 cash ($400k × 18.5%). The RDKit fee at 5% is $3,700 + $500 upfront — a net benefit of over $69,800 that didn’t exist before the claim.
This is where most confusion lives. AusIndustry requires core R&D activities to be genuinely experimental — you’re generating new knowledge, and the outcome can’t be known in advance, even by a competent professional in the field. The test is genuine technical uncertainty.
Supporting activities that directly enable your core R&D — building test environments, developing prototypes, collecting experimental data — can also be included. These often make up a significant portion of a claim.
ML model where you don’t know if the approach will reach target accuracy. New manufacturing process at untested scale. Novel compound with uncertain efficacy. IoT firmware for untested hardware combinations. Any technical problem where the answer isn’t obvious to an expert.
Implementing an established CRM. Routine software development with known methods. Copy-pasting a proven manufacturing process. Market research, business planning, or quality control. Anything where a competent professional would know how to do it from the start.
These represent typical claim profiles. Numbers and scenarios reflect real R&DTI claims; names are illustrative.
Melbourne SaaS startup building route-optimisation algorithms using ML. Technical uncertainty: whether the novel approach could beat existing heuristic methods with real-time traffic data at scale.
Sydney biotech developing a rapid diagnostic tool. Multiple unknowns: biosensor sensitivity, sample preparation, achieving consistent results outside controlled lab conditions.
Brisbane manufacturer experimenting with biodegradable polymer composites. Uncertainty: whether new materials could meet food-safety and shelf-life requirements at commercial scale.
Regional AgTech company building IoT soil-moisture sensors with custom firmware. Uncertainty: reliable wireless across large paddocks, calibration for diverse soil types.
After 5+ years in R&DTI consulting, these are the errors Kay sees most often — and every one of them is preventable.
The R&DTI covers software, engineering, manufacturing innovation, and more. If there's technical uncertainty, you may qualify — no lab coat needed.
AusIndustry needs to see a clear hypothesis, the technical uncertainty, and the experimental method. "We built a new app" gets rejected. This is where RDKit's expertise matters most.
Some companies include ineligible costs (marketing, admin). Others miss legitimate items: cloud hosting for R&D, contractor costs, depreciation on R&D equipment. Both mistakes are expensive.
If AusIndustry audits your claim, they want to see evidence the R&D happened — git commits, experiment logs, meeting notes, test results. Records created after the fact raise red flags.
You must register with AusIndustry within 10 months of your financial year end. For June 30 FY companies, that's April 30 the following year. No exceptions, no extensions.
If your financial year ends June 30, 2026, these are the dates that matter.
Your R&D activities occur during this financial year. Keep records as you go — don’t wait until the end of the year to document what you did.
Deadline to register your R&D activities with AusIndustry. This is 10 months after FY end and is completely non-negotiable.
Your accountant includes the R&D Tax Offset Schedule with your income tax return lodgement.
The offset hits your account. For refundable offsets (under $20M), this is a direct cash payment — even if you’re in a loss position.
Our free eligibility quiz gives you an instant answer and a rough estimate. No sign-up required.