Enter your qualifying R&D expenditures below and get an instant estimate of your federal and provincial SR&ED investment tax credit for 2026.
Using Budget 2025 rates. All fields are estimates — consult a tax professional for exact figures.
The SR&ED (Scientific Research and Experimental Development) Investment Tax Credit refunds up to 35% of eligible R&D expenditures for Canadian-Controlled Private Corporations (CCPCs) on the first $6 million in qualifying spend — fully refundable as cash, even if your company owes no taxes. Budget 2025 doubled the expenditure limit from $3M, restored capital expenditures as eligible costs, and introduced a new gross revenue phase-out election. The program distributes $4.5 billion annually across 22,738 claims, making it the single largest source of R&D funding in Canada. Non-CCPCs receive the 15% basic rate, which is non-refundable. Provincial credits — ranging from 0% to 30% depending on province — stack on top of the federal credit, pushing combined rates as high as 65% in Quebec for eligible SMEs.
The GrantCompass SR&ED Calculator uses the official CRA formulas updated for Budget 2025. Here is the step-by-step methodology behind your estimate.
Provincial R&D tax credits are separate from and additional to the federal SR&ED credit. These rates stack on top of your federal ITC.
| Province / Territory | Credit Name | Rate | Refundable? | Notes |
|---|---|---|---|---|
| Ontario | Ontario Innovation Tax Credit (OITC) | 8% | Yes (CCPCs) | Plus 3.5% ORDTC (non-refundable) |
| Quebec | Crédit d'impôt R&D (CRIC) | 30% | Yes | 30% SMEs (<$50M rev), 20% large corps |
| British Columbia | BC SR&ED Tax Credit | 10% | Yes | — |
| Alberta | Alberta Innovation Employment Grant | 8% | Yes | Up to 20% for some categories |
| Manitoba | Manitoba R&D Tax Credit | 15% | Yes | Split refundable/non-refundable |
| Saskatchewan | Saskatchewan R&D Tax Credit | 10% | Yes | $1M annual cap |
| Nova Scotia | Nova Scotia R&D Tax Credit | 15% | Yes | — |
| New Brunswick | New Brunswick R&D Tax Credit | 15% | Yes | — |
| Newfoundland & Labrador | Newfoundland R&D Tax Credit | 15% | Yes | — |
| Prince Edward Island | No provincial credit | 0% | — | PEI has no SR&ED credit |
| Yukon | Yukon R&D Tax Credit | 15% | Yes | — |
| Northwest Territories | No territorial credit | 0% | — | — |
| Nunavut | No territorial credit | 0% | — | — |
The single most important factor in your SR&ED credit is whether your company qualifies as a Canadian-Controlled Private Corporation. On $1 million in R&D spend, the difference is $200,000.
Not incorporated yet? CCPCs get 35% vs 15% — incorporation could be worth $200,000+ in additional credits on $1M of R&D spend. Incorporate online with Ownr in minutes →
Budget 2025 made the most significant improvements to SR&ED in over a decade. Every change benefits claimants.
These are the most common errors we see when businesses estimate their SR&ED credit — each one can mean leaving significant money on the table or having your claim reduced.
Filing as a non-CCPC without checking if corporate structure qualifies as Canadian-controlled. Some companies assume foreign minority shareholders disqualify them.
CCPC status depends on control, not just ownership percentages. A company with 40% foreign ownership can still be a CCPC if no single foreign party controls it. The 35% vs 15% difference on $1M is $200,000 — worth getting right.
Ignoring the taxable capital phase-out and assuming the full $6M expenditure limit applies regardless of company size.
If your taxable capital exceeds $15 million, your expenditure limit starts shrinking. At $45M, it is halved. At $75M, the enhanced rate is gone entirely. But Budget 2025's new revenue election may help — always calculate both.
Claiming 100% of subcontractor payments as eligible SR&ED expenditures.
Only 80% of payments to arm's-length subcontractors are eligible for SR&ED. If you paid $100,000 to a subcontractor, only $80,000 enters the calculation. This 20% ceiling is one of the most commonly overlooked rules.
Not reducing SR&ED eligible expenditures when receiving IRAP or other government assistance on the same R&D project.
IRAP contributions reduce your SR&ED pool dollar-for-dollar. If you have $500K in R&D costs and received $200K from IRAP, your SR&ED claim is on $300K only. Failing to disclose this can trigger CRA reassessment and penalties.
Missing the 18-month filing deadline because the accounting team assumed SR&ED could be filed retroactively at any time.
The 18-month deadline after your fiscal year-end is absolute and non-negotiable. Miss it by one day and you forfeit the entire claim. There are no extensions, no exceptions, and no appeals. Set a calendar reminder the day your fiscal year ends.
Identify whether your corporation is a CCPC. This determines whether you receive the 35% enhanced rate (refundable) or the 15% basic rate (non-refundable).
Sum eligible costs: employee salaries for R&D time, materials consumed in experiments, 80% of subcontractor fees, capital expenditures (Budget 2025), and overhead via proxy (55% of salaries) or traditional method.
If your taxable capital exceeds $15 million, your $6M expenditure limit begins to phase out. Calculate the reduction using: limit × max(0, 1 − (capital − $15M) / $60M).
Compare the capital phase-out result with the revenue phase-out (same formula, using prior-year gross revenue). Choose whichever gives you the higher expenditure limit.
Multiply the lesser of your total expenditures or your adjusted expenditure limit by 0.35. This is your refundable enhanced ITC.
If expenditures exceed the limit, multiply the excess by 0.15. This non-refundable portion reduces your tax owing and can be carried forward 20 years or back 3 years.
Apply the appropriate provincial R&D tax credit rate. Ontario has two credits (8% OITC + 3.5% ORDTC). Quebec applies 30% for SMEs. Saskatchewan caps at $1M. Three jurisdictions (PEI, NWT, NU) have no credit.
Divide total credits by total expenditures. A CCPC in Ontario recovers up to 46.5%. In Quebec, an SME can recover up to 65%. This is the percentage of every R&D dollar returned to you.
IRAP (the Industrial Research Assistance Program) is the most common funding to stack with SR&ED. IRAP contributions are non-repayable grants averaging $500,000 per firm, but they reduce your SR&ED expenditure pool dollar-for-dollar. Here is a worked stacking example.
Effective recovery rate: 67.9% of the original $500,000 R&D project. The IRAP + SR&ED + provincial combination is the most powerful R&D funding stack available in Canada. Approximately 3,100 firms receive IRAP funding each year.
Result: The company recovers $186,000 on $400,000 of R&D spending — an effective recovery rate of 46.5%. The $140,000 enhanced federal ITC is fully refundable as cash. The $32,000 OITC is also refundable. The $14,000 ORDTC is non-refundable and reduces Ontario taxes owed. That means $172,000 arrives as a cash refund regardless of the company's tax position.
Missing the filing deadline forfeits your entire claim. Plan these dates at the start of each fiscal year.
Maintain contemporaneous documentation: lab notebooks, test results, meeting minutes, employee timesheets separating R&D from non-R&D hours. Retroactive documentation is the number one reason claims are reduced.
Corporate tax return filing deadline. Many businesses file Form T661 and Schedule T2SCH31 with their return. Early filing accelerates your refund.
This is the latest possible date to file your SR&ED claim. There are zero exceptions. Missing this deadline by even one day means forfeiting the entire claim. Set a calendar alert the day your fiscal year ends.
CRA processing window for refundable claims. Straightforward claims from repeat filers typically process in 60 days. First-time filers and complex claims may take the full 120 days or longer if selected for review.
CRA may conduct a financial review, technical review, or both. This can extend processing to 6–12 months. You may receive a site visit. Respond promptly and have your contemporaneous documentation ready.
Need help with your SR&ED claim? The technical narrative is the most scrutinized part. Hire an SR&ED consultant on Fiverr →
Canada's largest R&D incentive program. 35% enhanced ITC for CCPCs on the first $6M of eligible expenditures (Budget 2025). 15% basic rate for all other corporations. $4.5 billion distributed annually across 22,738 claims.
Non-repayable grants averaging $500,000 for technology-driven SMEs conducting R&D in Canada. Approximately 3,100 firms funded annually. Stacks with SR&ED (reduces eligible expenditures dollar-for-dollar).
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Common questions about SR&ED calculations, eligibility, and the filing process.