SR&ED for Software Companies

Software development is one of the most common sources of SR&ED-eligible work in Canada. If your team is solving genuine technical problems — not just building features on top of documented frameworks — you likely have qualifying work.

Why software companies qualify

CRA recognizes that software development frequently involves genuine technological uncertainty. When your engineers are building something where no documented approach exists, where performance or accuracy targets can't be met using standard libraries, or where architectural constraints require original solutions — that's SR&ED work.

Software work that typically qualifies

• Developing novel algorithms where existing approaches failed to meet performance, accuracy, or latency requirements
• Building distributed systems where correctness, consistency, or throughput targets required original architectural solutions
• Creating machine learning models or inference pipelines where standard frameworks were insufficient
• Developing compilers, interpreters, or domain-specific languages where performance characteristics couldn't be predicted in advance
• Solving integration or interoperability problems between systems where no documented solution existed
• Achieving scalability or reliability targets at levels that required original investigation beyond documented best practices
• Security or cryptographic implementations where novel threat models or hardware constraints required original protocol design

Software work that does not qualify

• Routine application development using standard frameworks and documented APIs
• UI/UX design and front-end development work
• Configuration, deployment, and DevOps work using established tools
• Data migration, ETL pipelines, and database administration
• Bug fixing that doesn't involve resolving technological uncertainty
• Writing tests or test automation for already-developed software
• Feature additions that apply existing, well-understood technology

Documenting software SR&ED work

Software companies often have excellent contemporaneous documentation without realizing it:

• Git commit history — timestamped evidence of iterative investigation
• Issue trackers (Jira, Linear, GitHub Issues) — show the problem, hypothesis, and iteration
• Code review records — demonstrate the systematic evaluation of approaches
• Benchmark and profiling results — quantify the uncertainty and the advancement
• Architecture decision records (ADRs) — document why standard approaches were insufficient
• Sprint retrospectives — capture what was learned and what changed