Scenario 1 / 4
Technology
Software and platform R&D
Employee salaries
$93 000
Contractor fees
$28 000
Consumed materials
$12 000
Related overhead
$17 000
Total expenses
$150 000
Estimated SR&ED amount
$50,540
Calculate your SR&ED potential
Assess the SR&ED potential of your technical projects.
Get an initial screening of your work and expenses. The result is not an eligibility decision or a final tax calculation; a specialist must review the activities, contractor costs and supporting records.
How it works
How the SR&ED tax credit works
SR&ED may support work that seeks scientific or technological advancement through systematic investigation of scientific or technological uncertainty. Routine development is not enough. Assess work eligibility before estimating costs. Contractor and supporting-work costs require a clear link to eligible activities and a documented allocation; the scenarios below illustrate assumptions, not an entitlement.
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SR&ED scenarios
Illustrative federal ITC: 35% of eligible costs, with contractor fees included at 80%. Assumes the traditional method, sufficient expenditure limit and no assistance or provincial credits. Full assumptions appear in the FAQ below.
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Frequently asked questions
Need help deciding what applies to your business? Talk to an expert and get a clearer next step.
What does the SR&ED calculator help estimate?
It helps identify whether technical projects may deserve a closer SR&ED review by looking at development work, expenses, fiscal timing, and the presence of experimentation or technical uncertainty.
When should I use the SR&ED calculator?
Use it when your team has developed or improved a product, process, material, software system, or technical method and had to test options because the solution was not obvious at the start.
What should happen after the estimate?
A specialist should confirm the fiscal year, eligible activities, available evidence, and claimable expenses before preparing or quoting a file. The estimate is a screening tool, not a final claim.
How should contractor costs be included in an SR&ED estimate?
Identify the portion of the contract that relates to eligible SR&ED performed on your behalf in Canada. Exclude routine deliverables and retain a reasonable allocation supported by technical and financial records. Generally, 80% of an eligible arm’s-length contract expenditure enters the federal ITC base; this is not an 80% refund.
The scenarios show contractor fees before that adjustment and apply it once when calculating the illustrative federal credit. Non-arm’s-length contracts require separate analysis. Read the CRA contract expenditure policy and our SR&ED guide.
What assumptions do the SR&ED scenarios use?
These illustrative scenarios assume eligible Canadian work, qualifying salaries and materials, eligible overhead under the traditional method, and arm’s-length SR&ED contracts with taxable suppliers. They assume eligibility for the 35% federal ITC rate within the claimant’s available expenditure limit, with no assistance, provincial credits or other adjustments.
Formula: (salaries + materials + eligible overhead + 80% of eligible contractor fees) × 35%. For the technology example: ($93,000 + $12,000 + $17,000 + $22,400) × 35% = $50,540. Total spending remains $150,000; the federal ITC base is $144,400. The credit is not necessarily a cash refund.
A real claim depends on the claimant, tax year, work, records and applicable tax rules. Supporting activities must directly support eligible SR&ED and match its needs. Request an SR&ED assessment before relying on an estimate. Contractor treatment checked against CRA guidance on September 13, 2026.