R&D Tax Incentive Calculator Australia

The Research and Development Tax Incentive is an Australian Government program that provides a tax offset for eligible R&D activities. Companies with aggregated turnover under $20 million receive a 43.5% refundable tax offset. Companies with turnover of $20 million or more receive a non-refundable offset at their company tax rate plus 8.5%.

Eligible expenditure includes: employee wages for time spent on registered R&D activities, contractor and consultant fees for R&D work, cloud hosting and software used for R&D, materials and consumables, depreciation on R&D assets, and a portion of overhead costs (rent, utilities) apportioned to R&D activities. All activities must be registered with AusIndustry.

A refundable offset means you receive cash back even if your company has no tax liability (common for startups and early-stage companies). A non-refundable offset reduces your income tax payable but cannot generate a cash refund. Companies with aggregated turnover under $20 million get the refundable offset. Companies with turnover of $20 million or more get the non-refundable offset.

You must register your R&D activities with AusIndustry (Department of Industry, Science and Resources) within 10 months of the end of the income year in which the activities were conducted. Registration is done through the R&D Tax Incentive portal. You then claim the offset in your company tax return lodged with the ATO.

Currently, you must have at least $20,000 in eligible R&D expenditure to claim the incentive, unless the R&D was conducted with a registered Research Service Provider (RSP) or Cooperative Research Centre (CRC). The 2026-27 Federal Budget announced this threshold will increase to $50,000 from 1 July 2028.

Key changes announced (effective from 1 July 2028): the refundable offset threshold increases from $20M to $50M turnover (but limited to companies under 10 years old), offset rates for core R&D increase by 25-50%, the R&D intensity threshold reduces from 2% to 1.5%, the maximum expenditure cap increases from $150M to $200M, and the minimum spend threshold increases from $20,000 to $50,000.

This calculator uses the ATO R&D Tax Incentive rates for income years commencing on or after 1 July 2021. The refundable offset rate is 43.5% for entities with aggregated turnover under $20 million. The non-refundable offset rate is the company tax rate (25% for base rate entities) plus 8.5%, totalling 33.5%.

This is a simplified estimate. It does not account for the R&D intensity premium (additional offset for expenditure exceeding 2% of total expenses), clawback provisions, feedstock adjustments, or the $150 million expenditure cap. The calculator assumes all entered expenditure is on registered, eligible R&D activities.

This tool provides estimates only and does not constitute financial, tax, or legal advice. Always consult a registered R&D tax consultant or tax agent for your specific circumstances. Rates are current as at 1 July 2025.