Financial Recovery for Tech & SaaS Startups
Tech startups qualify for SR&ED on almost every engineering hour. Most file too late or claim too little.
Average recoverable per year
$48,000 – $240,000 / year
Median across Canadian tech CCPCs with 5–40 engineers. Upper bound for Quebec-based or Ontario-based companies stacking SR&ED + provincial e-business credits.
Why tech & saas businesses leak money
Software development that resolves technical uncertainty qualifies for SR&ED. Startups assume this means "AI research" — it includes algorithm optimization where multiple approaches needed testing, performance tuning under unusual constraints, integration work where the API was poorly documented, and architectural decisions made through systematic experimentation. Almost every engineering team is doing some SR&ED-eligible work.
Beyond SR&ED, startups uniquely under-optimize founder compensation (often defaulting to all dividends in a year when NOL carryforwards or salary-driven RRSP room would matter more), miss CDAP eligibility (yes, even technology companies can claim it for adopting analytics or cybersecurity tools), and let cloud/SaaS infrastructure costs grow unaudited.
Top recoverable leaks in tech & saas
SR&ED for engineering work
$60K–$220K/yrMedian first-year SR&ED claim for a Canadian tech CCPC with 8–15 engineers: $135K. Quebec-based companies stack provincial credits to 65% of qualifying salaries. Most startups under-claim by 30–50% on their first filing.
Cloud and SaaS infrastructure audit
$8K–$35K/yrAWS / GCP / Azure costs grow faster than headcount. Reserved instance optimization, dormant SaaS subscriptions, and overlapping tools (Datadog + New Relic, GitHub + GitLab, etc.) typically recover $8K–$35K/year for series A-stage companies.
Founder and early-employee compensation strategy
$6K–$22K/yrStock option grant timing, salary vs. dividend timing relative to NOL carryforwards, and RRSP optimization for founders typically recover $6K–$22K/year. The right structure also accelerates QSBS / LCGE qualification for eventual exit.
Provincial tech sector credits
$15K–$95K/yrOntario IETC, Quebec CDAE (e-business credit at 24% of payroll), BC Interactive Digital Media Tax Credit, and Nova Scotia Digital Media Credit can stack with SR&ED. Most startups outside Quebec are unaware of equivalent programs in their province.
Grants most relevant to tech & saas
Grant
SR&ED Tax Credit
Read eligibility →
Grant
Canada Digital Adoption Program
Read eligibility →
Grant
Canada Job Grant
Read eligibility →
Related research
Tax Credits
SR&ED Tax Credit in 2026: Who Qualifies and How Much You Can Claim
8 min read
Tax Optimization
Salary vs. Dividends: Owner Compensation for Canadian CCPCs in 2026
7 min read
Cost Recovery
How to Audit Your SaaS Subscriptions: A 5-Step Recovery Playbook
6 min read
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