{"id":972,"date":"2016-03-10T07:09:56","date_gmt":"2016-03-10T07:09:56","guid":{"rendered":"http:\/\/ausgrant.com.au\/?p=972"},"modified":"2017-05-31T04:30:28","modified_gmt":"2017-05-31T04:30:28","slug":"do-salaries-count-when-claiming-the-rd-tax-incentive","status":"publish","type":"post","link":"https:\/\/ausgrant.com\/au\/do-salaries-count-when-claiming-the-rd-tax-incentive\/","title":{"rendered":"Do Salaries Count When Claiming the R&D Tax Incentive?"},"content":{"rendered":"

\"embassy-935558_960_720\"<\/a>Salaries, wages, income or pay – whichever title takes your preference, the question remains the same. Are salaries eligible when claiming the Research and Development (R&D) Tax Incentive?<\/p>\n

In short, the R&D tax incentive is designed to encourage firms\u00a0to conduct research and development and is accessed via your company income tax return. It operates by enabling you to gain a credit on your tax payable, or, if your turnover is less than $20 million per year and you are in tax loss, to access up to 43.5% of your eligible R&D expenditure as a tax refund. However,\u00a0determining eligibility of both R&D activities and R&D expenditure is often where clients begin to get confused.<\/p>\n

It might surprise some that salaries (including management and support staff)\u00a0are an example of R&D Expenditure. However, it is vital to understand that Directors fees are not<\/em> eligible under the R&D Tax Incentive. As described above, the R&D Tax Incentive can reimburse up to 43.5% of eligible R&D costs. Therefore,\u00a0if staff are spending most of their time undertaking\u00a0R&D then an annual salary should definitely be considered.<\/p>\n

Fundamentally, salaries as a type of R&D expenditure includes expenditure to the extent that it is incurred on eligible R&D activities<\/em> for those of your employees engaged directly<\/em> in carrying out an eligible R&D activity. The expenditure may consist of:<\/p>\n