Salary data we require

The bulk of most R&D expenditure will be costs incurred for people (salaried staff and contractors). In order to calculate the eligible R&D expenditure we will need to know the total salaries incurred to staff during the financial year.

We ask for these to be actual moneys accounted for per person, not the contracted pay rate. Please ensure that this data is gross (not the amount paid, which is less withholding taxes), and whether or not superannuation is included or extra. The company totals should match the corresponding lines in the P&L. Sometimes these mismatch due to accruals for leave, or other adjustments, so please provide as complete a data set as possible so that we can reconcile.

We will then need the basis on which their R&D contribution is to be assessed. Our standard template includes selection options for hours, days, weeks, months or %ages. It is fine for each person to use a different method, depending on how their contribution to the eligible activities is measured and recorded.

We ask for the total per year, and then the amount per R&D activity.

We will also need to know if the person is an associate (for example if they are a founder, owner or Director), and whether they have received JobKeeper allowances.

Note that whatever basis for data capture, the method must be substantiated if the ATO decide to audit it. It is not necessary to keep timesheets, there are alternative methods to substantiate R&D effort, just make sure that they are contemporaneous (completed at the time of the activities, not prepared retrospectively in response to an audit being initiated).

Salary data can be provided via password protected files, or secure file transfer facilities. If the person reviewing the expenditure calculations is not authorised to view salary data, please let us know so that we can obscure or redact that section of the workbook.

We also require data about the use of resources by the staff or contractor to calculate eligible overheads for resources related to staff usage. If total ‘time on site’ data is available (for companies whose staff clock in and clock out), then this is used for the baseline. We require totals per resource ‘pool’ as well as total per individual. A pool could be a cost centre, team or other group where a specific resource is only used by that group. An example would be a software licence for a CAD system that is only used by an engineering team, some of whom use it as part of R&D activities.

If all resources are used by all staff, no pool or group data is necessary, but the company total is still required.

Deduct all leave times, as resources are not used when the staff are not working. We can then compare this to hours booked on R&D activities.

For companies that don’t record hours worked, the most common usage ratio uses a concept called FTE (Full Time Equivalent). A person who has worked full time for a full year is 1 FTE. If that person only worked 2 days a week, they would be 0.4 FTE. If they only worked for 6 months of the financial year for 2 days a week, then they would be 0.2FTE.

To calculate this, we need start and finish dates for anyone who started or finished within the financial year, and if part time, what is their ‘days per week’ basis. If the arrangement is more complex, then just include their contract and we’ll work it out.

We need this for all staff, as well as information on resource pools (the same as for hours).