Research allowance: examples and amountsWhat is it worth in euros?
Percentages do little to support a decision. So here we work through the research allowance on three complete examples. The companies are fictional, the calculation follows the German Research Allowance Act (FZulG).
of the assessment basis for all companies
for small and medium-sized enterprises on application
overhead flat rate for projects started after 31 December 2025
maximum annual assessment basis for expenses from 2026
The calculation
Four steps to the research allowance
Determine personnel cost
Gross pay plus employer social security contributions, in proportion to the time spent on research and development. In the examples we roughly assume 20% for employer contributions.
Add contract research
If you commission universities, institutes or others, orders placed since 28 March 2024 count at 70% of the fee.
Add the flat rate
If the project started after 31 December 2025, 20% is added for overheads and operating cost. No itemised evidence is required for this.
Apply the funding rate
The allowance is 25% of the total. Small and medium-sized enterprises can apply for ten percentage points more, reaching 35%.
Worked examples
Three fictional companies, fully calculated
These are not client cases and not promises. They show how the allowance builds up and what difference the funding rate and flat rate make. All amounts are per year.
Fictional example
Software company with 40 employees
Develops a new analysis method with an open technical outcome. SME, no contract research.
- Staff in R&D
- 4
- Avg gross annual salary
- €60,000
- R&D time share
- 60%
- R&D personnel cost
- €172,800
- Funding rate
- 35%
- Allowance, project before 2026
- €60,480
- Allowance, project from 2026 with flat rate
- €72,576
Fictional example
Mechanical engineering firm with 120 employees
Tests a new manufacturing process and has part of the trials carried out by a research institute. SME.
- Staff in R&D
- 8
- Avg gross annual salary
- €65,000
- R&D time share
- 40%
- R&D personnel cost
- €249,600
- Contract research (70% of €100,000)
- €70,000
- Funding rate
- 35%
- Allowance, project before 2026
- €111,860
- Allowance, project from 2026 with flat rate
- €134,232
Fictional example
Industrial company with 600 employees
Larger development department, new materials and test methods. Not an SME, so the standard rate applies.
- Staff in R&D
- 25
- Avg gross annual salary
- €70,000
- R&D time share
- 70%
- R&D personnel cost
- €1,470,000
- Funding rate
- 25%
- Allowance, project before 2026
- €367,500
- Allowance, project from 2026 with flat rate
- €441,000
Amount of the allowance
What each assessment basis produces
| Assessment basis per year | Standard rate 25% | SME 35% |
|---|---|---|
| €100,000 | €25,000 | €35,000 |
| €250,000 | €62,500 | €87,500 |
| €500,000 | €125,000 | €175,000 |
| €1,000,000 | €250,000 | €350,000 |
| €12,000,000 | €3,000,000 | €4,200,000 |
€12 million is the cap for expenses from 2026. Legal basis: Section 3 FZulG and Section 4 FZulG, as of 5 November 2026.
An honest calculation
Where the figure gets smaller in practice
Only genuine research and development counts
Novelty, technical risk and a systematic approach are required. The normal further development of a product generally does not qualify. The BSFZ certifies this.
The time has to be documented
Only working time on eligible projects is funded. In practice you need clean time records. A share estimated at year end is open to challenge.
SME status is more than headcount
The SME test includes linked and partner companies. If you belong to a group, you will often fall back to the standard rate of 25%.
Running projects without the flat rate
The 20% only applies to projects started after 31 December 2025. For older projects, the lower figure in our examples applies.
Who gets the allowance and how the application works is covered on our page about research allowance consulting in Dresden.
Research allowance calculator
What could it be worth for you?
Move the sliders to see roughly how high your annual research allowance (Forschungszulage) could be. The basis is your R&D personnel cost.
Estimated research allowance
€60,480
per year
on about €172,800 of eligible R&D cost at a 35% rate
Rough, non-binding estimate based on personnel cost. The overhead flat rate (20%, for projects from 2026) and contract research are not included and can increase the amount. What counts is the certificate from the BSFZ and the tax office assessment.
FAQ
Common questions
The most important questions about calculating the research allowance and its amount.
How high is the research allowance?
It is 25% of the assessment basis, and small and medium-sized enterprises can receive 35% on application. With €500,000 of eligible expenses, that is €125,000 or €175,000 per year.
What is the maximum research allowance?
For expenses from 2026, the assessment basis is capped at €12 million per year. Arithmetically, that gives up to €3 million in allowance, or up to €4.2 million for SMEs. Linked companies share the limit. In addition, under the current wording of the law, state aid per company and project may not exceed €15 million.
How do you calculate the research allowance in an example?
Four developers with a €60,000 gross salary, 60% of their working time on research and development and roughly 20% employer contributions result in €172,800 of personnel cost. At 35% that is a €60,480 allowance. If the project started after 31 December 2025, the 20% flat rate raises this to €72,576.
Are these real client cases?
No. All companies and figures on this page are fictional and only illustrate the calculation. What is possible for you depends on your projects, your evidence, the BSFZ certificate and the tax office assessment.
Does the managing director's salary count?
Yes, if they are employed, the salary is subject to wage tax withholding and they actually work on research and development. This also applies to shareholders with an employment contract. Only documented time on the eligible project counts.
Is the research allowance paid out if we make no profit?
Yes. The allowance is offset against the tax liability. If there is an excess or no tax is due, the amount is paid out. That makes it attractive for loss-making companies too.
First consultation
Let's calculate it for
your company.
Send us your estimate from the calculator or briefly describe your projects. In a first consultation we look together at what may be eligible and what order of magnitude is realistic. No obligation.