Reviewed by Logan Hanson, BSc, CPA. Last verified against CRA guidance on August 4, 2026.
Most SR&ED refunds are lost to a short list of mistakes, and almost all of them are unforced. Not fraud, not aggressive claiming, just ordinary errors: claiming too little, forgetting whole cost categories, or writing the claim the wrong way. Here are the common SR&ED claim mistakes I see cost companies real money, and how to avoid each one.
The most common mistakes are claiming only the obvious project, forgetting contractor and support costs, not tracking time, writing the claim around the product, waiting until the deadline, and choosing a fee model that eats the refund. Most of them cost you quietly, by shrinking a claim you never see the full size of. Let’s go through them.
Eligible work is usually scattered across the year, not concentrated in one flagship project. Claiming only the obvious one misses the hard integration, the performance fix, and the uncertain slice buried in a project you didn’t think of as R&D. Fix it by reviewing your whole year for eligible work.
Salaries are the obvious line, so they get claimed and the rest gets forgotten. Canadian arm’s-length contractors are claimable at 80% of the eligible amount, and support work directly tied to the experiment can qualify too. Leaving these out is one of the biggest sources of under-claiming.
Without a way to trace who worked on the eligible work and roughly how much, you end up guessing, and cautious guesses run low. Fix it by labelling R&D tickets and projects during the year so time can be allocated with confidence.
A claim framed around what the product does, instead of the technological uncertainty, doesn’t establish the technological uncertainty, systematic investigation and advancement the CRA needs to see, so it gets reduced. Fix it by leading with what you didn’t know and how you investigated it, in the CRA’s terms.
Leaving the claim to the last minute means reconstructing a year from memory, which is both weaker and riskier. Worse, it risks bumping into the 18-month filing deadline, and the CRA very rarely accepts late claims. Fix it by capturing evidence through the year and filing with room to spare.
A percentage fee quietly takes a bigger slice every year your refund grows, even though the filing work doesn’t scale the same way. Over several years that adds up. Fix it by comparing the lifetime cost of a percentage fee against a flat fee before you commit.
Under-claiming usually costs more than any single filing error. In this example, missing $168,000 of qualifying expenditures costs an eligible CCPC about $58,800 in federal credit. Take a CCPC that claims only its obvious project, capturing $265,000 in salaries, for about $92,750 in federal credit before overhead and provincial credits. The mistakes cost it:
Caught, those lift the base from $265,000 to about $433,000, for roughly $151,550 in federal credit before the prescribed-proxy overhead amount and provincial credits. That’s about $58,800 of federal credit left behind, purely from under-claiming. This is illustrative, so your numbers will vary. For an eligible CCPC the enhanced 35% credit is refundable, applies to the first $6 million of qualifying expenditures, provides up to $2.1 million a year, phases out with taxable capital, and shares that limit among associated corporations. See our State of SR&ED overview for context.
Before filing, review every project for eligible work, capture every eligible cost, check your time records and technical framing, mind the deadline, and weigh your fee model. Run this to catch the mistakes that cost the most.
SRED.ca charges a flat fee, billed monthly, never a percentage or contingency fee, which usually works out to roughly half the lifetime cost of a percentage-based firm. As far as we know, we’re the only SR&ED provider that publishes its pricing on its website. We review your whole year, capture contractors and support costs, track time as you go, and frame the claim around the uncertainty, which is how these mistakes get avoided in the first place. We’re CPA-owned, audit defense is included, and if the CRA approves less than 75% of the filed claim we waive our fees, as set out in our 75% guarantee. If there’s no eligible work in your year, you don’t pay.
The SR&ED mistakes that cost the most aren’t dramatic. They’re the quiet ones: claiming too little, forgetting costs, and filing at the last minute. Review your whole year, capture every eligible cost, frame around the uncertainty, and file early, and you avoid nearly all of them. If you want a second set of eyes to catch what you might be missing, grab a free consultation. The CRA’s SR&ED program page is the official source for the rules.
Related reading: why tech firms struggle with SR&ED claims, how SR&ED tax services support startup R&D credits, and what could go wrong if founders file on their own.
The most expensive SR&ED mistakes are usually under-claiming: looking only at the obvious project and forgetting contractor and support costs.
Under-claiming by only looking at the obvious project. Eligible work is usually spread across the year, so reviewing just the flagship project leaves smaller pockets of uncertain work, and the costs attached to them, unclaimed.
Under-claiming is the more common trap. Most companies are cautious and leave eligible work out rather than risk including something questionable, so the typical mistake costs you refund you were entitled to.
It can. Padding a claim with routine work weakens the whole thing and can invite a closer review that trims the credit. The goal isn’t to claim more than you should, it’s to claim everything you genuinely can and show it well.
Sometimes. If you’re still inside the 18-month window for that year, you may be able to amend or add to the claim. Once the window closes, the year is generally locked, so it’s worth catching mistakes before the deadline.
Review your whole year rather than one project, capture contractors and support work, track time as you go, frame each project around the uncertainty, and file with room before the deadline. A checklist and a second set of eyes go a long way.
Price and quality aren’t the same thing. What matters is whether they review your whole year, write a strong technical narrative, and stand behind the claim. Judge on expertise and what’s included, not just the headline fee.
This article is general information, not tax advice. Tax figures depend on your corporation type, province, and taxation year.
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