Innovation drives business growth, and the ATO research and development tax incentive helps companies invest in it. Knowing which expenses qualify for your R&D application is key.
What Qualifies as an R&D Expense?
Generally, R&D expenses that are directly related to your R&D activities are eligible for the research and development tax incentive. These can include:
Employee Salaries
This covers wages, bonuses, and other compensation for employees directly involved in R&D. This includes scientists, engineers, programmers, and even technicians who contribute to the research process.
Materials and Supplies
Costs for materials consumed or used in the R&D process, such as lab equipment, prototypes,
and testing materials.
Contract Research
Payments to third-party contractors for conducting R&D activities on your behalf. These can be eligible for R&D tax incentive application.
Software and Cloud Computing
Expenses related to software used in R&D and cloud computing services necessary for research activities.
Depreciation of Assets
Depreciation of assets directly used in R&D, such as specialized equipment or facilities.
Overheads
A portion of overhead costs directly attributable to R&D activities, such as rent and utilities for labspace.
By understanding the eligible expenses for the research and development tax incentive and following the tips outlined in this blog, you can effectively leverage this incentive to support your innovation efforts and drive business growth.
Contact R&D Assist to Help with Your R&D Tax Claim Application
R&D Assist can help with any tax claims related to research and development. Our tax experts provide consultation and assistance in the tax application process. Contact us today for more details.