Before 30 June: The R&D Tax Incentive Checklist Every Australian Startup Founder Should Run
June 30 is 17 days away. If you have been building something technically challenging in Australia this financial year, that date matters more than most founders realise.
The common assumption is that nothing happens until the AusIndustry registration deadline next April. For a 30 June year-end, you have until 30 April 2027 to lodge your R&D activities registration. That deadline is real and absolute. But waiting nine and a half months to start thinking about your claim is how founders leave money on the table.
A few things must happen before June 30. A few more are far easier done now than in March 2027. Here is the practical checklist.
Associate Payments Must Hit Before 30 June
This is the rule most founders miss, and it can affect your claim by tens of thousands of dollars.
If your company owes money to an associate for R&D work done this year, that payment must actually be made, by cash transaction, before 30 June to count as eligible expenditure in this year’s claim.
An associate, under the R&D Tax Incentive rules, generally means any entity or individual with a majority voting interest or sufficient influence over your company. In practice, this commonly includes founders who have been contracting to the company through their own entity, related companies performing development work, or directors who have invoiced the company for technical services.
Accruing the expense is not enough. Recording the liability in your books without making the actual payment does not qualify the expenditure for this year’s claim. The ATO reviewed more than 200 R&D registrations recently and flagged associate payments as a key compliance focus. They will look for evidence of actual cash payment.
If you have outstanding invoices owed to related parties for R&D work done this year, pay them before June 30. If paying by then is not possible, the expenditure can be carried forward to a future year, but it will not count in FY2025-26.
Document Your Work Now, While It Is Fresh
The ATO and AusIndustry want contemporaneous records. That means documentation created at or close to the time the work was done, not reconstructed from memory nine months later.
A development sprint you ran in November 2025 is much clearer in your mind now than it will be in March 2027. The engineers who worked on it may have moved on. The Notion page documenting those iterations may be archived. The Slack thread where your team worked out why the algorithm was not working is buried three layers deep.
Use the next few weeks to capture what actually happened this year while the detail is still fresh.
For software and SaaS founders, the most useful records include:
- GitHub commit histories, which already exist and give a timeline of what was built and what changed through iteration
- Project logs from Notion, Jira, Linear, or any tool your team uses, especially notes on which sprints involved genuine technical uncertainty
- Brief written summaries per project covering what the technical challenge was, what approaches failed, and how you eventually solved it
- Technical specs and design documents from early in a project, especially where you were evaluating options with uncertain outcomes
- Contractor invoices and statements of work from any Australian developers who worked on genuinely experimental parts of the product
For hardware, medtech, and consumer goods founders: prototyping records, material test results, supplier communications about manufacturing challenges, and documentation of failed designs all form part of a solid claim.
You do not need lab notebooks or formal research logs. You need enough of a record to show there was a problem your team did not know how to solve upfront, that you tried things, some of which did not work, and that the outcome depended on that experimentation.
Get Your R&D Costs Coded Separately
Before June 30, talk to your bookkeeper or accountant about how development spend is coded in your accounts.
When building your claim, the task is to identify which expenditure connects to eligible R&D activities. If development salaries, contractor invoices, and cloud hosting costs are all mixed in with general operating expenses, the process of untangling them takes longer and risks leaving eligible spend unclaimed.
This does not need to be a full audit. Even a rough pass, adding a tag or tracking category to development-related costs in Xero or your accounting tool, helps significantly.
Costs worth flagging:
- Development salaries or contractor fees for Australian developers
- AWS or cloud hosting for test and development environments (not production)
- Software licences used specifically for R&D purposes
- Materials used in prototyping or testing
Costs for offshore labour do not qualify under the R&D Tax Incentive. But any Australian spend on the same project, including founder time, local contractors, and domestic software tools, is worth coding separately for review.
Check Your Entity Eligibility
A quick check before year end covers a few things.
Your company must be incorporated in Australia. Sole traders, most trusts, and partnerships of individuals are not eligible entities. Australian subsidiaries of foreign companies can qualify.
Your Australian R&D spend for the year should be at or above $20,000. That is the current minimum threshold. The 2026 Budget announced a lift to $50,000, but that does not apply until 1 July 2028. For FY2025-26, the $20,000 minimum still applies.
For the refundable offset at 43.5%, your company turnover needs to be under $20 million. That is the version that matters most for early-stage startups, because it pays out as actual cash, even if your company is making a loss. Over $20 million in turnover, you access a non-refundable offset instead.
What Actually Qualifies: The Technical Uncertainty Test
The R&D Tax Incentive does not require groundbreaking innovation, a laboratory, or a PhD. It requires technical uncertainty. The work must involve an outcome that could not be known in advance, where your team had to generate new knowledge through experimentation and iteration.
The practical test: Was there a point where your team genuinely did not know if something would work? Did you try approaches that did not pan out? Did the outcome depend on experiments and iteration rather than the straightforward application of established methods?
What does not qualify: routine bug fixes, standard software builds, implementing a tool in the obvious way it was designed to be used, market research, and quality control testing of existing processes.
Software founders often underestimate their own work. Custom algorithms, novel machine learning models trained on proprietary datasets, systems requiring non-obvious engineering solutions, and complex product development where the approach was not determined from the start are all common qualifying activities.
The Current Rules Apply in Full for FY2025-26
For the year ending 30 June 2026, the R&D Tax Incentive rules are unchanged. The refundable offset is 43.5% for companies under $20 million turnover. Supporting activities are still eligible, provided they meet the dominant purpose test. The minimum spend is $20,000. The registration deadline is 30 April 2027.
The 2026 Budget changes to the program, including the removal of supporting activities, the higher minimum spend, and refundability restrictions for older companies, do not apply until 1 July 2028. None of it affects your FY2025-26 claim.
If your work this year included core experimental activities and supporting work directly related to that core, both can potentially be included in this year’s claim. Document both.
Why Acting Now Beats Waiting Until April
The 30 April 2027 AusIndustry registration deadline is absolute. Miss it, and the claim for FY2025-26 is gone. There are no extensions.
But the mistake most startups make is treating that deadline as when preparation should start. By March 2027, the development work done in the first half of this financial year is 15 to 18 months in the past. Reconstruction is harder, the records are thinner, and the ATO knows the difference between a contemporaneous record and a retrospective summary.
The two to three hours you spend now, pulling together commit histories, writing brief project summaries, and checking your accounts, produces better evidence and a stronger claim than doing the same thing nine months later with fading memory and departed team members.
What to Do Before June 30
Pay any outstanding invoices owed to related parties for R&D work done this year, before the cash-payment deadline.
Ask your bookkeeper to code or tag R&D-related costs separately in your accounts.
Spend a few hours writing up the key technical work you did this financial year. Focus on what the challenge was, what your team did not know how to solve upfront, and what failed along the way.
Confirm your entity is eligible, your Australian R&D spend clears $20,000, and your turnover is under $20 million if you want the refundable offset.
If you are not sure whether your work qualifies, how large your claim might be, or what documentation you actually need, a quick conversation is the fastest way to get clarity. Book a free call at go.granton.io. No cost, no commitment, just a clear answer on where you stand before the year closes.
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