In this article, we list a range of examples that help to explain how to calculate R&D Tax Credits in Ireland for accounting periods ending in 2025 and 2026.
As well as helping to illustrate how the credit is calculated in practice, our examples also demonstrate when and how you’ll receive your credit as the R&D Tax Credit is paid in three annual instalments (unless you qualify for receiving the full payment in the first year).
As you’ll see below, the process of calculating R&D Tax Credits is fairly straightforward (as long as you’re applying the right rates for the accounting period). But the key to correctly estimating the size of your credits isn’t knowing the right R&D Tax Credits rates; it’s understanding the complexities around knowing what counts as qualifying expenditure, and how to apportion those costs correctly.
If you’re not sure what qualifies, our advice is to keep detailed records of your innovative projects as you go. It makes calculating your exact tax relief much easier and will also help you when it comes to creating a robust claim that satisfies Revenue’s strict criteria.
If you have any questions about calculating your credit, or if you’d like to speak to someone to discuss the eligibility of your project, please just get in touch. We’re here to help.
How to calculate R&D Tax Credits
R&D Tax Credits are worth up to 30% of qualifying expenditure, rising to 35% for accounting periods starting on or after 1 January 2026. Below, we provide examples for both periods.
For accounting periods ending in 2025:
Instalment rules
Year one:
- Companies with an R&D credit of under €75,000 receive their full refund paid in their first year.
- Claims over €75,000 will receive a 50% refund (or €75,000, whichever is greater).
Year two: The second instalment is 60% of the remaining balance.
Year three: The last instalment is the remaining balance.
Example R&D Tax Credits calculations (2025 year end)
Example one: If an SME claimed €16,500 they would receive the full R&D Corporation Tax Credit in their first year.
|
R&D Tax Relief for Year ended 31 December 2025 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €250,000 | 20% | €50,000 |
| Cloud computing costs | €10,000 | 50% | €5,000 |
| Total qualifying expenditure: | €55,000 |
|
| Tax Credit Rate: | 30% |
| R&D Tax Credit: | €16,500 |
| Instalments (FY25) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €16,500 | N/A | N/A |
Example two: If a large company claimed €150,000 they would receive €75,000 in year one, €45,000 in year two, and €30,000 in year three.
|
R&D Tax Relief for Year ended 31 December 2025 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €2,000,000 | 20% | €400,000 |
| Cloud computing costs | €100,000 | 50% | €50,000 |
| Plant & machinery costs | €200,000 | 25% | €50,000 |
| Total qualifying expenditure: | €500,000 |
|
| Tax Credit Rate: | 30% |
| R&D Tax Credit: | €150,000 |
| Instalments (FY25) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €75,000 | €45,000 | €30,000 |
Example three: If a large company claimed €210,000 they would receive €105,000 in year one (because 50% of their claim exceeds €75,000), €63,000 in year two, and €42,000 in year three.
|
R&D Tax Relief for Year ended 31 December 2025 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €2,500,000 | 20% | €500,000 |
| Cloud computing costs | €100,000 | 50% | €50,000 |
| Plant & machinery costs | €600,000 | 25% | €150,000 |
| Total qualifying expenditure: | €700,000 |
|
| Tax Credit Rate: | 30% |
| R&D Tax Credit: | €210,000 |
| Instalments (FY25) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €105,000 | €63,000 | €42,000 |
For accounting periods ending in 2026:
Instalment rules
Year one:
- Companies with an R&D credit of under €87,500 receive their full refund paid in their first year.
- Claims over €87,500 will receive a 50% refund (or €87,500, whichever is greater).
Year two: The second instalment is 60% of the remaining balance.
Year three: The last instalment is the remaining balance.
Example R&D Tax Credits calculation (2026 year end)
Example four: If an SME claimed €70,000 they would receive the full R&D Corporation Tax Credit in their first year.
|
R&D Tax Relief for Year ended 31 December 2026 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €400,000 | 30% | €120,000 |
| Rental costs | €50,000 | 100% | €50,000 |
| Overheads | €60,000 | 50% | €30,000 |
| Total qualifying expenditure: | €200,000 |
|
| Tax Credit Rate: | 35% |
| R&D Tax Credit: | €70,000 |
| Instalments (FY26) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €70,000 | N/A | N/A |
Example five: If a large company claimed €175,000 they would receive €87,500 in year one, €52,500 in year two, and €35,000 in year three.
|
R&D Tax Relief for Year ended 31 December 2026 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €2,000,000 | 20% | €400,000 |
| Cloud computing costs | €100,000 | 50% | €50,000 |
| Plant & machinery costs | €200,000 | 25% | €50,000 |
| Total qualifying expenditure: | €500,000 |
|
| Tax Credit Rate: | 35% |
| R&D Tax Credit: | €175,000 |
| Instalments (FY26) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €87,500 | €52,500 | €35,000 |
Example six: If a large company claimed €350,000 they would receive €175,000 in year one (because 50% of their claim exceeds €87,500), €105,000 in year two, and €70,000 in year three.
|
R&D Tax Relief for Year ended 31 December 2026 |
|---|
| Qualifying Expenditure | Total Amount | % Qualifying | Qualifying Expenditure (€) |
|---|
| Staffing costs | €2,500,000 | 20% | €500,000 |
| Cloud computing costs | €300,000 | 50% | €150,000 |
| Plant & machinery costs | €500,000 | 50% | €250,000 |
| Overheads | €400,000 | 25% | €100,000 |
| Total qualifying expenditure: | €1,000,000 |
|
| Tax Credit Rate: | 35% |
| R&D Tax Credit: | €350,000 |
| Instalments (FY26) | 1st Instalment | 2nd Instalment | 3rd Instalment |
| €175,000 | €105,000 | €70,000 |
Our clients’ success stories
The best way to learn about the benefits of R&D Tax Credits is through reading our clients’ success stories:
EliteForm Manufacturing: EliteForm had previously made R&D Tax Credits claims, but their former accountant was unable to provide the same level of detail as our experts, which meant they were missing out on the full benefit. They were also concerned that a claim would raise the chances of a Revenue audit but were impressed by our focus on risk mitigation and dedication to compliance.
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