The R&D Tax Incentive explained: 43.5% back on your development costs

Updated July 2026 · 5 min read

The Research and Development Tax Incentive (R&DTI) is the most valuable funding most Australian businesses have never claimed. If you're building, improving or problem-solving something with a genuinely uncertain outcome, a large chunk of what you spend may be claimable — as cash.

What it actually gives you

Companies with an aggregated turnover under $20 million can claim a refundable tax offset of 43.5% on eligible R&D expenditure. "Refundable" is the important word: if your business is pre-profit or running at a loss because of its development work, the offset comes back to you as a cash refund from the ATO, not just a reduction in tax owed.

The biggest myth: "we don't do R&D"

Most owners picture lab coats and scientists. In reality, eligible R&D includes developing new software, building a novel product, or engineering a better process on the workshop floor — anywhere you're experimenting to resolve a technical unknown that couldn't be worked out just by looking it up. "We don't do R&D" is one of the most expensive sentences in Australian business.

Am I eligible?

• You're an incorporated Australian company (not a sole trader or partnership).
• Aggregated turnover under $20 million for the refundable offset.
• At least $20,000 of eligible R&D spend in the year (with some exceptions).
• Genuine "core" R&D activities involving technical uncertainty and a systematic approach.

The deadline that catches people out

You must register your R&D activities with AusIndustry within 10 months of the end of your income year — for a 30 June year-end, that's 30 April the following year. It's strict and can't be extended, so contemporaneous records kept through the year make claim time far easier.

What to do next

If any of your work this year involved solving a genuine technical problem, it's worth checking. Grantiv's free finder flags the R&DTI alongside other programs you may qualify for — and an accountant or R&D specialist can confirm your specific eligibility.

This article is general information, not financial or legal advice. Grant programs, amounts and eligibility change often — always confirm current details on the official government page before applying. Last reviewed July 2026.