Part 1 · SR&ED basics
What is SR&ED?
Canada's biggest tax incentive for research. If your team solves hard technical problems, part of what you spend can come back to you.
In short
SR&ED stands for Scientific Research and Experimental Development. It is a federal program run by the Canada Revenue Agency (CRA). Businesses that do qualifying research in Canada can deduct those costs and earn an investment tax credit on them.
It is not a grant you apply for in advance. You do the work, keep records, and claim it with your corporate tax return. Provinces add their own credits on top.
Who can claim
- Corporations of any size that do the work in Canada. This is where most claims come from.
- Canadian-controlled private corporations (CCPCs) get the best rate: a 35% credit that is paid out in cash even if you owe no tax.
- Other corporations earn a 15% credit that lowers tax owing. Since the 2026 changes, some public corporations can earn the 35% rate too.
- Individuals, partnerships and trusts can also claim, with different rules.
Software counts
SR&ED is not just labs and test tubes. A lot of claims are software work, as long as it meets the tests in the next chapter.
How the money works
| Who | Rate | How you get it |
|---|---|---|
| CCPC, first $6M a year of eligible spending | 35% | Refundable: cash back, even with no tax owing |
| CCPC, above the limit | 15% | Lowers tax owing, can be carried forward |
| Other corporations | 15% | Lowers tax owing, can be carried forward |
Example: a CCPC that spends $400,000 on eligible salaries could get back about $140,000 federally, before any provincial credit.
How this app helps
- It reads your GitHub history and finds the work most likely to qualify.
- It links that work to the people who did it and estimates their eligible hours.
- It drafts the claim report and the technical narrative the CRA asks for.
You and your preparer stay in charge: every number can be reviewed and adjusted before anything is filed.
Sources
This guide helps you prepare. It is not tax advice. Have your SR&ED preparer review your claim before you file.