How to Maximize Your SR&ED Refund: A Canadian Founder's Guide
Strategies to maximize your SR&ED refund without overclaiming. Learn what to include, what to exclude, and how to build a defensible claim that captures the full value of your R&D.
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Claim everything you can support
The most common mistake in SR&ED is underclaiming. Companies that genuinely did qualifying work often claim only a fraction of what they could defensibly support. The goal is to claim the full value of your R&D without crossing into overclaiming.
- Include all qualifying wages, including technical leadership time (CTOs, VPs, senior architects)
- Claim arm's-length contractors at 80% of cost — many companies forget them entirely
- Include materials consumed in qualifying experiments
- Use the proxy method for overhead (55% of direct labour) if it simplifies your claim
- Document time allocation with reasonable support from project records
What not to claim
Overclaiming creates CRA review risk and can damage your credibility for future claims. Be precise about what qualifies and exclude everything that doesn't.
- Don't claim routine development work that didn't involve systematic investigation
- Don't claim time for non-technical staff (sales, marketing, admin) unless they did qualifying work
- Don't claim overhead using the proxy method if the traditional method gives a better result
- Don't include non-arm's-length contractors — related-party contractors are disallowed entirely
- Don't estimate time allocations without reasonable support from project records
The goal is to claim what you can accurately support. A well-calibrated claim at 90% of maximum is better than an aggressive claim at 110% that gets reviewed and reduced.
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Check whether your work qualifies, estimate the possible credit, or preview the package your CPA would review.
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