It’s a new financial year – Let’s recap what the R&D tax incentive program is.
What Is the R&D Tax Incentive? A Guide for Innovators
If your business is building new products, improving processes, or solving technical challenges — you might be eligible for one of Australia’s most generous programs supporting innovation: the R&D Tax Incentive.
Each year, thousands of businesses across industries — from biotech and SaaS to manufacturing and agtech — use this program to claim back a portion of their R&D expenses. Yet, many still miss out simply because they assume they don’t qualify.
This guide breaks down what the R&D Tax Incentive is, who it’s for, and how you can start benefiting.
What is the R&D Tax Incentive?
The R&D Tax Incentive (RDTI) is a federal program jointly administered by AusIndustry and the Australian Taxation Office (ATO). Its goal is to encourage Australian businesses to invest in innovation by offsetting some of the costs of eligible R&D activities.
If your business qualifies, you could receive:
- A 43.5% refundable tax offset (for companies with under $20M aggregated turnover), or
- A non-refundable tax offset dependant on your “R&D Intensity” (for companies with over $20M aggregated turnover)
- R&D expenditure up to 2% R&D intensity: the rate is your corporate tax rate plus an 8.5% premium.
- Additional R&D expenditure above 2% R&D intensity: the rate is your corporate tax rate plus an 16.5% premium.
This means that eligible startups can receive a refundable tax offset — even if they’re pre-revenue or not paying tax
Who Is Eligible?
Many assume this program is only for labs or tech startups. In reality, the programs reach is broader than most people think.
To qualify, your company must:
- Be incorporated in Australia and liable to pay income tax.
- Be undertaking at least 1 eligible Core R&D activity
- Core R&D activities are activities with outcomes that a competent professional can’t know or determine in advance, based on current knowledge, information and experience.
- The outcomes of core R&D activities can only be determined by applying a systematic progression of work that:
- is based on principles of established science
- proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions.
- You must conduct core activities for the purpose of generating new knowledge. Your new knowledge can be in the form of new or improved materials, products, devices, processes or services.
Eligible expenses can include wages, contractor costs, consumables, and software development — as long as they meet eligibility requirements and they relate to the R&D work.
We’ve worked with clients across all sectors including, but not limited to:
- Agriculture: Developing climate-resilient crop techniques
- Manufacturing: Improving production efficiency through automation
- Fintech & SaaS: Building novel backend platforms or security models
- Healthtech: Developing medtech prototypes or digital diagnostics
If you’re trying something new that hasn’t been done before — or can’t be easily solved using existing knowledge — there’s a strong chance you’re doing R&D.
Why It Matters
The R&D Tax Incentive isn’t just about recouping costs — it’s about building a smarter growth strategy.
to:
- Reinvest in their next development cycle
- Hire more engineers or talent
- Extend their runway before raising capital
- Signal credibility to investors and partners
When used correctly, it can become a pillar of reliable innovation funding.
How Noah Connect Can Help
At Noah Connect, we specialise in helping businesses identify, structure, and maximise their R&D Tax Incentive claims. Our team of lawyers, scientists, strategists, and tax experts ensures that:
- Your claims are compliant
- Your team learns how to track and document activities and expenditure effectively
- You don’t miss out on other funding opportunities or grants you may also be eligible for
Ready to find out if your work qualifies?
Reach out for a free R&D eligibility consultation — or read our blog for weekly tips on how to maximise government support for your innovation.
📬 Stay tuned: Next week, we’ll map out Australia’s full innovation funding ecosystem — and how the RDTI fits into a broader funding strategy.
