Scientific Research and Experimental Development (SR&ED)
Tax Incentive Program

The Scientific Research and Experimental Development Tax Incentive Program is one of Canada's largest incentive for businesses in all industry sectors conducting research & development.

Eligible businesses may claim a deduction against income or earn an investment tax credit (ITC) to reduce the total income tax payable.

To be eligible for SR&ED, the work must be conducted in Canada and meet both of the following requirements:
1. The work must be conducted for the advancement of scientific knowledge or for the purpose of achieving a technological advancement.
2. The work must be a systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis.

Thus, you may claim for the following types of work:
1. Basic research;
2. Applied research;
3. Experimental development; or
4. Support work.

Allowable SR&ED expenditures include:
1. Salary or wages of employees directly engaged in SR&ED;
2. Cost of materials consumed in performing SR&ED;
3. Cost of materials transformed in performing SR&ED;
4. Contract expenditures for SR&ED performed on your behalf;
5. Overhead and other expenditures; and
6. Third-party payments.