Research allowance (FZulG): the legal entitlement with a 25 % funding rate, 35 % for SMEs

The research allowance is a statutory entitlement under the Research Allowance Act (FZulG): the funding rate is 25 % of the assessment basis, or 35 % for SMEs. For contract research commissioned after 27 March 2024, 70 % of the fee is eligible; before the additional flat rate this yields 17.5 % or 24.5 % of the full fee. The calculator shows the result for EUR 500,000 in personnel costs and EUR 100,000 in contract research; what we take on and what stays with you is explained below.

Check your funding options in a first consultation Dossier
  • Funding rate 25 %, for SMEs 35 %
  • Assessment basis capped at EUR 12 million a year
  • Two-stage application: BSFZ, then research allowance application (ELSTER)

Written by Max Nodes, Founder and Managing Director · 25 of 25 supported BSFZ applications certified (as of 09/2026) · Last updated: · Law as of:

Your research allowanceLegal position from 2026
SME under Annex I GBER
fewer than 250 employees, up to EUR 50 million turnover or EUR 43 million balance sheet total
Project and year
The 20 % flat rate applies only to projects started after 31 December 2025 (§ 3 (3b) FZulG). Cap: EUR 12 million for expenses from 2026, EUR 10 million for 2024 and 2025 (§ 3 (5) FZulG).
R&D personnel costs (employer gross)EUR 500,000
Development contracts with third parties · 70 %+ EUR 70,000
Own contributions (§ 3 (3))+ EUR 0
Overhead flat rate 20 %+ EUR 114,000
Assessment basisEUR 684,000
Funding rate 35 %EUR 239,400
Research allowance per year EUR 239,400 35 % funding rate · contract fee: 24.5 % before the 20% flat rate

Offset against the tax assessment, any surplus is paid out (§ 10 FZulG)

Take these figures into a first consultation

The Forschungszulage in three sentences

The research allowance (FZulG) funding rate is 25 % of the assessment basis, or 35 % for SMEs. For contract research commissioned after 27 March 2024, this equals 17.5 % or 24.5 % of the fee before the additional flat rate. Every company liable to income or corporate tax in Germany is eligible, regardless of industry or profit (§ 1 FZulG). The assessment basis adds up personnel costs, 70 % contract research and own contributions from sole proprietors and partners; for projects starting from 2026 a 20 % flat rate is added. Capped at EUR 12 million a year, giving up to EUR 4.2 million for SMEs. The application runs in two stages: first the BSFZ certificate, then research allowance application (ELSTER) at the tax office.

The essentials of the research allowance

  • Eligibility
    Every company liable to tax in Germany (§ 1 FZulG)
  • Funding rate
    25 %, for SMEs 35 % (§ 4 (1) FZulG)
  • Assessment basis
    Personnel costs, 70 % contract research, own contributions; capped at EUR 12 million a year
  • Maximum allowance
    EUR 4.2 million (SME), EUR 3 million (large enterprise)
  • Application
    BSFZ certificate, then research allowance application (ELSTER) at the tax office
  • Track record
    25 of 25 accompanied BSFZ applications approved (as of 09/2026)

    • What does NOVARIS take on, and what stays with you?

    NOVARIS supports the whole way from the first assessment to being ready for a later audit; you provide the project data and time records.

    1. free

      First consultation

      We classify your projects under § 2 FZulG and estimate the assessment basis (Bemessungsgrundlage).

      NOVARIS
    2. 2–4 weeks

      Analysis and documentation

      We document the projects, you provide time records and cost evidence.

      You and us
    3. up to 3 months

      BSFZ review

      The Certification Body for the Research Allowance reviews the project and issues the certificate.

      Certification office
    4. with the tax return

      research allowance application (ELSTER)

      We prepare research allowance application (ELSTER); it is filed with the tax return.

      Tax office
    5. 4–12 weeks after research allowance application (ELSTER)

      Assessment and payout

      The tax office offsets the allowance against the tax liability or pays it out (§ 10 FZulG).

      Tax office

    6. Tax audit

      The documentation stays ready in case the tax authorities review the project later.

      NOVARIS
    30 % of the fee falls due with the BSFZ decision, 70 % only after the allowance has been paid out.

    Which companies can apply for the research allowance, and what are the requirements?

    Every company liable to income or corporate tax in Germany is eligible, regardless of industry, size or profit (§ 1 FZulG).

    • Corporations: GmbH, AG, UG
    • Partnerships: GbR, OHG, KG, GmbH & Co. KG
    • Sole proprietors: freelancers and tradespeople
    • Foreign permanent establishments in Germany

    Eligible projects fall into three categories under § 2 FZulG: basic research, industrial research and experimental development. Three criteria decide eligibility: novelty, technical risk and a systematic approach, not the size of the innovation.

    A project needs no breakthrough invention. It is enough that the outcome was open at the start and the company worked on it systematically.

    How the allowance is calculated from these costs: Calculation.

    What our clients have achieved

    • EUR 1.2 millionSoftware2024–2026

      Research allowance approved for 2024 and 2025, certified by the BSFZ for 2026, allowance expected

      The BSFZ certificate covers three fiscal years: 2024 and 2025 retroactively, 2026 ongoing. NOVARIS wrote the project description, reconstructed the hours per project from payroll journals, project plans and payroll data with the creation date openly disclosed, and coordinated research allowance application (ELSTER) with the tax adviser.

      Software company
    • EUR 5 millionMedical technology2023–2026

      Research allowance approved for newly developed analysis devices (2023–2025), certified by the BSFZ for 2026, allowance expected

      Four fiscal years, three of them retroactive: for 2023 to 2025 the hours per project and person had to be reconstructed afterwards, robust enough for the tax office and the tax audit. With around EUR 5 million in approved and certified allowance, the largest of the four mandates shown here; the analysis devices were new developments with a clearly stated technical risk.

      Medical technology company

    We publish client names and logos only once they explicitly approve it.

    Get your funding options confirmed in a first consultation

    We classify your projects under § 2 FZulG and estimate the assessment basis. You pay only once the allowance is approved.

    Book a first consultation

    Read on

    1. Research Allowance Report 2026What changed in 2026, in figures
    2. Check eligibilityA short check of your project in a few questions
    3. Funding programmes comparedResearch allowance, ZIM, KMU-innovativ and EIC side by side
    4. Research allowance: the factsFunding rate, cap, deadlines and legal basis on one page
    5. Research allowance calculatorCalculate the assessment basis and allowance from your own personnel costs.
    6. Research allowance amountFunding rate, assessment basis and the maximum allowance in detail.
    7. How to apply for the research allowanceBSFZ application and research allowance application (ELSTER) step by step.
    8. Research allowance for SMEsThe increased 35 % funding rate and the SME criteria.
    9. Research allowance personnel costsWhich wage components count toward the assessment basis.
    10. Research allowance own contributionsEUR 100 per hour for sole proprietors and partners.
    11. Research allowance contract researchThe 70 % rule for externally commissioned R&D providers.
    12. Research allowance FAQAll questions on the basics, funding amount, application and payout.
    13. R&D Tax Credit ConsultingWhat consulting delivers and how the work together happens.
    14. Cost of R&D tax credit consultingWhat the fee costs and when it is due.
    15. Compare research allowance advisersProviders for research allowance consulting by verifiable claims.
    16. Research allowance for mid-sized companiesThe SME funding rate, worked examples and what to watch for.
    17. Research allowance for large companiesAffiliated companies, the EUR 12 million cap and group structures.
    18. Filing with the tax officeHow the research allowance application reaches the tax return.
    19. Filing it yourselfWhat you have to do without a consultant.
    20. Forms for the research allowanceBSFZ certificate, application form and evidence at a glance.
    21. Application exampleA completed BSFZ application as a template.
    22. Calculating the research allowanceAssessment basis and allowance step by step.
    23. Research allowance material costsWhich material costs flow into the assessment basis.
    24. Research allowance and tax advisorsWho files the application and who provides the certificate.
    25. GmbH & sole traderWhy own contributions only count for sole proprietors and partners.
    26. Research allowance and corporate taxHow the allowance is treated for tax purposes.
    27. Booking the research allowanceRecording the BSFZ certificate and payout correctly.
    28. Time tracking for the research allowanceDocumented reconstruction of R&D hours.
    29. Payout of the research allowanceHow and when the tax office pays out the allowance.
    30. Research allowance retroactivelyWhich fiscal years can still be applied for.
    31. BSFZ rejection and appealWhat is possible after a rejected certificate.
    32. BSFZ portal guideStep by step through the certification portal.
    33. Research allowance vs. ZIMDifferences to the Central Innovation Programme for SMEs.
    34. Research allowance vs. EU fundingDifferences to Horizon Europe and the EIC.
    35. ResultsApproved cases and what NOVARIS has filed so far.
    36. FZulG 2026 UpdateWhat changes with the overhead surcharge and the funding rate.
    Max Nodes

    Max Nodes

    Founder and Managing Director of NOVARIS Consulting. Specialised in the German R&D tax credit (FZulG) since 2021; 25 of 25 accompanied BSFZ applications approved (as of 09/2026). Max Nodes