What's proposed
The 2026–27 Federal Budget proposes to raise the minimum R&D expenditure threshold from $20,000 to $50,000, from 1 July 2028, as part of the redesign of the R&D Tax Incentive.
Crucially, the change isn't a simple cut-off. As the Budget puts it, for smaller projects:
"For smaller research and development projects of under $50,000, the Government will require businesses to work with recognised research organisations to support quality research outcomes." — Backing Small Business factsheet, p. 4
So R&D under $50,000 can still reach the incentive — but the route changes: it would need to be undertaken with a recognised research organisation, such as a Research Service Provider (RSP) or a Cooperative Research Centre (CRC), rather than claimed on a standalone in-house basis.
The measure is unlegislated and applies to income years starting on or after 1 July 2028; the current rules continue until then.
Who this affects
| If your eligible R&D spend is… | Now | From 1 July 2028 (proposed) |
|---|---|---|
| **$50,000 or more** | Standard self-assessment (above the current $20,000 minimum) | Standard self-assessment |
| **Under $50,000** | Eligible above the current $20,000 minimum | Must be undertaken with a recognised research organisation (e.g. an RSP or CRC) |
This is most relevant to smaller or early-stage R&D programs that today run a modest amount of in-house experimental work and claim it directly.
What to think about now
- It's years away and unlegislated. Don't restructure a program around a rule that hasn't passed. But it's worth knowing the direction if you run small in-house R&D.
- Documentation still decides the claim. Whatever the route, the substance is the same: you need contemporaneous records showing the activity was genuine experimental R&D. Working with an RSP or CRC doesn't remove the need to evidence the work — it changes who performs it.
- Watch the detail. What counts as a "recognised research organisation", and how the threshold interacts with the rest of the redesign, will be settled through legislation and guidance. Confirm against the final rules and your adviser before acting.
Dossio captures R&D evidence in structured, dated, audit-ready form as the work happens — for in-house programs and for work done with research partners alike.
Sources
- Australian Government — Backing small businesses (Small Business Statement) — minimum threshold and recognised research organisations, p. 4
- Australian Government — Budget 2026–27: Tax reform
- business.gov.au — Research and Development Tax Incentive overview