Updated Checked by the Tax-Services.ca editorial team How we check
SR&ED is a federal tax incentive for research and development done in Canada, and at the top rate it is a 35% investment tax credit on up to $6 million of qualifying spending a year. That’s the CRA’s current figure, after Bill C-15 received Royal Assent on March 26, 2026. Above the limit a lower rate applies, and we haven’t relied on a number for it here.
What does SR&ED Canada actually pay for?
Work, not products. The CRA says eligible work has to be done in Canada, aim at advancing scientific knowledge or achieving a technological advancement, and be a systematic investigation or search in a field of science or technology, carried out by experiment or analysis. The gap has a name: scientific or technological uncertainty. If a competent team could have known the answer at the start, it probably isn’t SR&ED.
The CRA is plain that a systematic approach to your work is not the same thing as systematic investigation, and that using established techniques or protocols doesn’t make it one.
The money you spend on that work is what earns the credit. Salaries of employees who do the work directly, materials, and contract payments count, and for arm’s length contractors, 80% of the payment qualifies for the credit. Eligible capital spending made after December 15, 2024 can also be claimed.
The headline change is in the CRA’s own words on its SR&ED news and updates page:
The maximum annual expenditure limit for the enhanced 35% investment tax credit (ITC) has increased from $3 million to $6 million.
SR&ED news and updates, canada.ca
| Item | Current CRA position |
|---|---|
| Top credit rate | 35% |
| Annual spending limit for that rate | $6 million, up from $3 million |
| Taxable capital phase-out range | Prior-year taxable capital of $15 million to $75 million |
| Applies to | Tax years beginning after December 15, 2024 |
| Public companies | Eligible Canadian public corporations now have access to the 35% rate |
| Corporate filing deadline | 12 months after the T2 due date, so 18 months after year end |
| Forms | T661 plus Schedule T2SCH31 (T2038(IND) for individuals) |
What does a claim look like in dollars?
Say your corporation qualifies for the 35% rate and has $200,000 of eligible spending in a year. At 35%, the federal credit is $70,000. Spend $6 million and it reaches $2.1 million, which is the ceiling at that rate. Our calculators don’t model SR&ED, so that’s plain arithmetic on the CRA’s rate. Whether the credit is paid to you in cash, offsets tax or carries forward depends on your corporation. Read the CRA page for your situation.
A smaller case makes it real. Priya runs a four-person software company in Kitchener, and $50,000 of her payroll for two developers went into a project that meets the test. At 35% the credit is $17,500. That’s far more than a few bucks for a small shop, but only if the file backs it up.
The credit also interacts with your tax bill. To see what a year’s profit looks like before and after, try the corporate tax calculator. Wages inside the claim carry payroll costs, which you can work out with the payroll remittance calculator and the payroll deductions calculator.
Do you need a consultant for an SR&ED claim?
Not by law. You can file the claim yourself with an accountant or in house. Plenty of companies hire specialists because the technical write-up is the hard part, and a weak description of the uncertainty is where claims run into questions.
We couldn’t verify anything about consultant fees, success fees or how firms price this work, so we make no claim about them. Ask any adviser three plain things before you agree: what they charge and how, who writes the technical report, and who answers if the CRA reviews the claim. Also ask what they’d need from the people doing the work. If the answer is “not much”, that’s a warning.
Mistakes that sink a claim
The biggest one is leaving the paperwork until the deadline. You need records from when the work happened: what you tried, what failed, who did it and how many hours. Timesheets are far easier to build during the project than a year later.
Another is claiming work that was only hard, not uncertain. And a third is forgetting that the work must be done in Canada, and that contract spending with non-arm’s length parties can be deducted but doesn’t earn the credit.
The CRA has also introduced pre-claim approval, available from April 1, 2026, with determinations within eight weeks. On its updates page the CRA says it launched the process on April 1, 2026, and that a business can get a determination within eight weeks. Its pre-claim approval page says applying is optional and that your planned work is evaluated before you incur significant costs.
Not everyone qualifies for that route. The page lists conditions such as gross business income under $25 million and being in good standing with the CRA, so read the full list before you apply.
Where the numbers come from
The rate, limit, phase-out range, dates, deadline and forms come from the Canada Revenue Agency‘s SR&ED pages, read in September 2026. The 35% figure is that page’s top rate. We don’t sell SR&ED services and haven’t checked any firm’s claims about what it can recover.
Frequently asked questions
What is the top SR&ED credit rate?
The CRA lists a 35% investment tax credit at the top rate, on up to $6 million of eligible spending a year, for tax years beginning after December 15, 2024.
What work qualifies for SR&ED?
Work done in Canada that advances scientific knowledge or achieves a technological advancement, as a systematic investigation by experiment or analysis, and that involves technological uncertainty.
When is the SR&ED claim deadline for a corporation?
12 months after the T2 return is due, which works out to 18 months after the year end.
Which forms do I file?
Form T661 with Schedule T2SCH31 for a corporation, or Form T2038(IND) for an individual.
Do I need a consultant?
The rules don't require one. We could not verify any consultant's fees or results, so ask for terms in writing.
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