Eligibility Quick Check

Does Your Business Qualify for SR&ED? 10 Questions to Ask

Most businesses that qualify for SR&ED never apply — not because the work doesn’t count, but because no one asked the right questions. Run your current or recent projects through these ten questions to get a fast read on whether an SR&ED eligibility assessment is worth pursuing.

1. Did you try to solve a problem where the outcome wasn’t obvious in advance?

If a competent person in your field couldn’t have predicted the result before you started, that’s a sign of technological uncertainty — the core requirement for SR&ED.

2. Did you look for an existing solution and not find one that worked?

Projects that start with buying an off-the-shelf tool rarely qualify. Projects that start with “nothing available does what we need” often do.

3. Did your team test, measure, and adjust their approach?

SR&ED rewards systematic investigation — hypothesis, test, analyze, iterate — not one-off trial and error.

4. Did anything fail or not work as expected?

Failed experiments are a strong eligibility signal, not a disqualifier. They demonstrate that the outcome genuinely wasn’t known in advance.

5. Did you keep any record of the work as it happened?

Design notes, code commits, lab logs, or meeting notes discussing technical roadblocks all support a claim. No records makes a claim harder, not impossible — but harder.

6. Was the work more than a style change or minor customization?

Cosmetic changes, UI tweaks, and reskins generally don’t qualify on their own.

7. Did the project require specialized technical staff?

Engineers, developers, scientists, and technologists doing hands-on experimental work is a common thread across eligible claims.

8. Did you generate knowledge you didn’t have before — even if the product didn’t ship?

Technological advancement doesn’t require commercial success. New understanding of what works, or what doesn’t, is enough.

9. Is your industry assumed to be “non-technical”?

SR&ED claims come from construction, food manufacturing, agriculture, and trades just as often as software and biotech. Industry alone doesn’t determine eligibility.

10. Has this project ever been discussed as “just engineering” internally?

That phrase is worth a second look. The line between routine engineering and eligible experimental development is often narrower than teams assume.

About The Author

Dale Doering

Dale Doering is the owner of SRED Consultants Inc., helping businesses navigate the complexities of Scientific Research and Experimental Development (SR&ED) claims. With a strong understanding of the technical and interpretive requirements of the SR&ED program, Dale works with companies to identify eligible projects, document technological challenges, and clearly demonstrate the systematic experimentation or analysis undertaken to achieve advancement. His approach focuses on translating complex technical work into well-supported SR&ED claims, helping clients maximize eligible opportunities while maintaining a clear understanding of the program’s requirements.

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Frequently Asked Questions

What counts as "technological uncertainty" for SR&ED?

Technological uncertainty occurs when a technical problem cannot be resolved using standard, publicly available knowledge or off-the-shelf solutions. If your team encounters a challenge where it is unclear if or how a specific result can be achieved without systematic testing and experimentation, it qualifies as uncertainty.

No, success is not a requirement. The Canada Revenue Agency (CRA) focuses on the process of scientific or technological investigation rather than the final outcome. Even if a project failed, was abandoned, or produced negative results, you can still claim expenses as long as you followed a systematic approach to overcome technical challenges.

Eligible expenses generally include:

1. Salaries and Wages:
Direct pay for employees performing or directly supporting qualifying R&D work.

2. Subcontractor Fees:
Payments to Canadian third-party contractors performing eligible SR&ED work on your behalf.

3. Materials:
Costs of raw materials consumed or transformed during the experimentation phase.

Software companies qualify frequently. You don’t need a formal laboratory; experimental work in software architecture, algorithm optimization, system scalability, or new data integration techniques often qualifies as long as it goes beyond routine web design, standard feature integration, or basic bug fixing.

You need evidence created as the work progressed that demonstrates a systematic, iterative approach. This includes technical notes, design iterations, testing logs, commits/code repos, project plans, meeting notes regarding technical hurdles, and time-tracking records linking specific employee hours to R&D activities.

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