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Benefits of SR&ED Tax Credits

Qualified Canadian Controlled Private Corporations (CCPC’s) can receive federally up to 35% back of eligible expenditures incurred in the development of new or improved products or processes. Foreign owned or public corporations can qualify for a 15% tax credit (this was changed from 20% to 15% in 2014) on eligible expenditures.

$88,908,312.76 & Counting, In Claimed Credits
Get Started & Claim Your Share

 Most Canadian provinces offer additional tax credits on qualified SR&ED expenditures. Depending on the province, SR&ED claimants can earn additional provincial SR&ED tax credits. The funds that you receive from the SR&ED program can be invested back into your business in the form of new equipment, new hires, expanding your facilities, taking on more challenging projects, or paying down debts.

How SR&ED Tax Credits are Calculated

The following charts show the value of tax credits from an example set of expenditures:

Example of SR&ED Expenditures
Calculation of Qualified SR&ED Expenditures Expense SR&ED Eligible
Labour/Wages (T4) $90,000 $90,000
Overhead Proxy: 55% of Eligible Labour) $49,500
Materials Destroyed + Transformed $5,000 $5,000
Arms-length Subcontracts (80%) $5,000 $4,000
Total Qualified Expenditures $100,000 $98,000


Example of Calculating Tax Credit (CCPC)*
SR&ED Expenditures $98,000
Ontario – OITC (10%) $9,800
Ontario – ORDTC (4.5%) $3,969
Federal – ITC (35%) $29,481
Total SR&ED Benefit For You (43.25%) $43,250
* CCPC – Canadian Controlled Private Corporation

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