{"id":5629,"date":"2019-11-20T13:31:46","date_gmt":"2019-11-20T13:31:46","guid":{"rendered":"https:\/\/rdactionconsultant.com\/?p=5629"},"modified":"2025-11-27T18:29:53","modified_gmt":"2025-11-27T18:29:53","slug":"administrative-expenses-in-sred","status":"publish","type":"post","link":"https:\/\/rdactionconsultant.com\/en\/blog\/administrative-expenses-in-sred\/","title":{"rendered":"Administrative expenses in SR&#038;ED"},"content":{"rendered":"<div class=\"vgblk-rw-wrapper limit-wrapper\">\nWhen do some expenses other than those associated with scientific research or experimental development projects could be eligible for the SR&amp;ED tax credit?<\/p>\n<p>The Canada Revenue Agency (CRA) issued the Policy on <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/scientific-research-experimental-development-tax-incentive-program\/overhead-other-expenditures-policy.html\" target=\"_blank\" rel=\"noopener\"><strong><span>Overhead and Other SR&amp;ED Expenditures<\/span><\/strong><\/a>. It explains the rules regarding the deductibility of administrative salaries or wages in the context of SR&amp;ED activities.<\/p>\n<p>Overall, administrative expenses :<\/p>\n<ul>\n<li>Must be &#8220;directly related&#8221; to the exercise of SR&amp;ED, and<\/li>\n<li>They would not have been incurred if the SR&amp;ED activities had not been carried out (additional cost).<\/li>\n<\/ul>\n<p>The phrase &#8220;directly related&#8221; here is important; the work performed by a particular employee or division must be linked to one of the following three elements, and must be done without any intermediary or step that intervenes between the employee \/ division and,<\/p>\n<ul>\n<li>SR&amp;ED work; or<\/li>\n<li>SR&amp;ED staff; or<\/li>\n<li>Equipment used by staff to perform SR&amp;ED.<\/li>\n<\/ul>\n<p>In many cases, to properly determine whether an expense is directly related, an analysis of the tasks performed is required to ensure that a direct, unmediated link is present with the SR&amp;ED work. Here are two partial lists of examples of tasks considered directly or indirectly related to SR&amp;ED &#8211; based on the &#8220;SR&amp;ED Overhead and Other Expenditures Policy&#8221;:<\/p>\n<h2>Directly related to SR&amp;ED work\u00a0 (claimable)<\/h2>\n<ul>\n<li>Salary or salary of administrative or clerical personnel providing services to SR&amp;ED staff.<\/li>\n<li>SR&amp;ED financing (is &#8220;directly related&#8221; if the funds are used to carry out SR&amp;ED activities).<\/li>\n<li>Assessment, recruitment and hiring of SR&amp;ED personnel.<\/li>\n<li>Implementation of the technical and control of scientific projects, definition of future SR&amp;ED projects, supervision of the SR&amp;ED group, selection \/ evaluation of SR&amp;ED projects.<\/li>\n<li>Evaluating the technical feasibility of a product and the potential SR&amp;ED efforts and costs involved.<\/li>\n<li>Technological planning of ongoing SR&amp;ED projects (assignment of technological personnel, priority of work, development of technological strategies, quality of materials to be used).<\/li>\n<li>The work of clerical support staff for tasks directly related to SR&amp;ED payroll, procurement and accounting.<\/li>\n<\/ul>\n<h2>Indirectly related to SR&amp;ED work\u00a0(not claimable)<\/h2>\n<ul>\n<li>Costs related to the management of the business (not related to SR&amp;ED)<\/li>\n<li>Costs related to bids.<\/li>\n<li>Purchases (other than direct purchases of SR&amp;ED materials \/ equipment).<\/li>\n<li>Taxation and legal services.<\/li>\n<li>Sales, marketing and advertising.<\/li>\n<li>Employee relations.<\/li>\n<li>Development of benefit programs for SR&amp;ED employees.<\/li>\n<li>Corporate secretariat and report to shareholders.<\/li>\n<li>Initiation and closure of licensing agreements.<\/li>\n<li>Feasibility studies (non-technological) that lead to potential SR&amp;ED collaborations and assess the commercial feasibility of a given technology.<\/li>\n<li>Commercialization of existing intellectual property.<\/li>\n<li>Review and approval of SR&amp;ED budgets.<\/li>\n<li>Applications for patents.<\/li>\n<\/ul>\n<p>At the federal level, these expenses are included in the proxy. In Quebec, it is possible to claim a credit on these expenses if the traditional method is chosen.<\/p>\n<p><strong><u>Important note:<\/u><\/strong> <strong>the information contained in this blog is for information only. Before evaluating or submitting a claim, you must consult an accounting or tax specialist and the relevant policies available on the <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/scientific-research-experimental-development-tax-incentive-program.html\" target=\"_blank\" rel=\"noopener\"><span>Canada Revenue Agency<\/span><\/a> (CRA) website.<\/strong><\/p>\n<p>We are honored by your visit to our blog. <a href=\"https:\/\/rdactionconsultant.com\/en\/\" target=\"_blank\" rel=\"noopener\"><strong><span>R&amp;D Action<\/span><\/strong><\/a> thanks you for that.<\/p>\n<p>On the right of this page the index contains several other categories of practical and applicable solutions that are also intended for you.<\/p>\n<p>Did you like your reading? Tell usso.hare it. What should be added? What topics are you interested in?<\/p>\n<p>Did not like this reading? Tell us so.What did you like least about this text? How can we better meet your needs?<\/p><\/div>\n<p><!-- .vgblk-rw-wrapper --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When do some expenses other than those associated with scientific research or experimental development projects could be eligible for the SR&amp;ED tax credit? The Canada Revenue Agency (CRA) issued the Policy on Overhead and Other SR&amp;ED Expenditures. It explains the rules regarding the deductibility of administrative salaries or wages in the context of SR&amp;ED activities&#8230;.<\/p>\n","protected":false},"author":8,"featured_media":5630,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[87],"tags":[],"class_list":["post-5629","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-calculation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Administrative expenses in SR&amp;ED - R&amp;D Action<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rdactionconsultant.com\/en\/blog\/administrative-expenses-in-sred\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Administrative expenses in SR&amp;ED - R&amp;D Action\" \/>\n<meta property=\"og:description\" content=\"When do some expenses other than those associated with scientific research or experimental development projects could be eligible for the SR&amp;ED tax credit? 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