The plain-English rules for R&D eligibility.

The R&D offset only covers expenditure incurred by the company. If you sign the lease personally, the company hasn't incurred the rent — even if you use a room for R&D. Put the company on the lease, and you can apportion the R&D workspace share.

When the company pays rent on a home you live in, the personal-use portion is a fringe benefit (taxed at 47% grossed-up). You reduce this to zero by paying the company back for the personal share — either as a direct contribution or via a formal sublease at market rent.

A founder-director's salary, apportioned to R&D time, is the most common claimable item for startups. Keep a timesheet or project log — even a simple weekly summary. On-costs (super, workers' comp, payroll tax) are apportioned at the same R&D percentage.

The ATO doesn't accept a single blanket percentage for everything. Rent is apportioned by floor area, salary by time (timesheets), power by metered use or time, equipment by R&D-use percentage. Pick the method that fits each cost.

The ATO's position is clear: keep your floor-plan sketch, timesheets, and apportionment records at or near the time the expenditure is incurred. Retrospective estimates prepared only at claim time are viewed with scepticism.

If you do R&D at a warehouse and admin work at a home office, both locations' overheads can be claimed — each apportioned separately. There's no rule limiting a claim to one site.

Fuel, maintenance, rego, insurance, and depreciation are claimable at the R&D-use percentage. Keep a log book for 12+ weeks to establish the split. Daily commuting doesn't count — only travel directly connected to R&D.

A home shed or garage used to store R&D equipment, materials, or a company vehicle used for R&D can be included in the premises apportionment by floor area. It must have a genuine link to R&D — not just general household storage.

Chemicals, components, prototyping supplies, and other consumables used up in R&D experiments are claimable in full. If materials serve both R&D and production, apportion using batch tracking or inventory records.

Payments to contractors or consultants performing R&D under the company's direction are claimable. Related-party (associate) amounts are limited to their actual costs and only when paid. Overseas R&D needs an Overseas Finding first.

For companies with aggregated turnover under $20M, the 43.5% offset is refundable — if it exceeds your tax liability, the ATO pays the difference as cash. It's claimed in your annual tax return, not upfront.

The R&D Tax Incentive is only available to incorporated companies (Pty Ltd). Sole traders, partnerships, and trusts are not eligible. If you're a sole trader doing R&D, incorporate first — but R&D done before incorporation can't be claimed.

Grants that reimburse specific R&D costs may make those costs 'not at risk' — and expenditure not at risk isn't claimable. You must disclose all government recoupments. Your advisor reviews each grant's conditions.

'We don't know if customers will buy it' is commercial risk — not R&D. 'We don't know if this material will withstand the load' is technical uncertainty — that's what the program is for.

Commercialising R&D outcomes is encouraged. Feedstock adjustments may claw back part of the benefit if R&D produces a saleable product, but the original claim stands.

Dossio explains how these rules work in general terms so you can have an informed first conversation with your advisor. Your R&D tax advisor and accountant confirm the right structure, amounts, and FBT treatment for your specific situation.