Research allowance: every figure with its paragraph
Funding rate, assessment basis and cap at a glance, each figure with its place in the law. The calculator below shows the assessment basis for EUR 300,000 in personnel costs and EUR 80,000 in contract research.
- Funding rate 25 %, for SMEs 35 %
- Assessment basis capped at EUR 12 million a year
- Every figure with its paragraph and primary source
Written by Max Nodes, Founder and Managing Director · 25 of 25 supported BSFZ applications certified (as of 09/2026) · Last updated: · Law as of:
Every claim needs evidence
Figures and details
Worked example for EUR 300,000 in personnel costs and EUR 80,000 in contract research, SME rate, project started in 2026.
Key facts in brief
The research allowance amounts to 25 % of the assessment basis, for SMEs 35 % (Section 4 (1) FZulG). The assessment basis includes personnel costs (Section 3 (1)), 70 % of contract research (Section 3 (4)) and, for sole proprietors and partners, EUR 100 per working hour (Section 3 (3)); for projects from 2026 a 20 % flat rate is added to this sum (Section 3 (3b)). The assessment basis is capped at EUR 12 million a year (Section 3 (5)), so the maximum allowance is EUR 4.2 million for SMEs and EUR 3 million for large enterprises. Nationwide application and approval figures are in the Forschungszulage Report 2026.
The essentials of the research allowance
The Research Allowance at a Glance
| Parameter | Value | Legal Basis |
|---|---|---|
| Funding rate | 25 %, for SMEs 35 % | Section 4 (1) FZulG |
| Assessment basis | capped at EUR 12 million a year | Section 3 (5) FZulG |
| Maximum allowance | EUR 4.2 million (SME) | 35 % of EUR 12 million |
| Contract research | 70 % eligible | Section 3 (4) FZulG |
| Own contributions | EUR 100 per hour, at most 40 h/week | Section 3 (3) FZulG |
| Overhead flat rate | 20 %, projects from 2026 only | Section 3 (3b) FZulG |
| Legal entitlement | yes, once the three R&D criteria are met | § 1 FZulG |
| Procedure | two stages: BSFZ application, then research allowance application (ELSTER) | § 5, § 6 FZulG |
| Offset | against the tax assessed, surplus is paid out | § 10 FZulG |
What are the key figures of the research allowance in 2026?
Twelve values, each with its place in the law.
| Parameter | Value | Legal basis |
|---|---|---|
| Funding rate | 25 %, for SMEs 35 % | Section 4 (1) FZulG |
| Assessment basis | capped at EUR 12 million a year | Section 3 (5) FZulG |
| Maximum allowance | EUR 4.2 million (SME), EUR 3 million (large enterprise) | 25/35 % of EUR 12 million |
| Personnel costs | 100 % of the wages subject to payroll tax withholding | Section 3 (1) FZulG |
| Own contributions | EUR 100 per working hour, at most 40 h/week, sole proprietors and partners only | Section 3 (3) FZulG |
| Contract research | 70 % of the fee, contractor based in the EU or EEA | Section 3 (4) FZulG |
| Depreciation on assets | depreciation of the fiscal year, acquired after 27 March 2024 | Section 3 (3a) FZulG |
| Overhead flat rate | 20 % on personnel costs, own contributions, depreciation and contract research, projects from 2026 only | Section 3 (3b) FZulG |
| Affiliated companies | the EUR 12 million cap applies to the whole group | Section 3 (6) FZulG |
| State aid limit | all state aid per project at most EUR 15 million | Section 4 (3) FZulG |
| Procedure | two stages: BSFZ application, then research allowance application (ELSTER) | § 5, § 6 FZulG |
| Offset | against the tax assessed, surplus is paid out | § 10 FZulG |
How much does the 20 % flat rate add for an SME?
A worked example shows the flat rate in practice.
The flat rate raises the assessment basis by 20 %. The allowance as a share of the entered costs depends on SME status, cost mix and the cap; the calculator reflects all of these factors (Sections 3 (3b), 3 (5) and 4 (1) FZulG).
SME example
EUR 100,000 in personnel costs, project started in 2026.
The funding rate remains 35 % of the assessment basis. For new projects, the 20 % flat rate increases the assessment basis separately; the cap applies afterwards.
How does the two-stage procedure work?
First the BSFZ certifies the project, then the tax office sets the allowance.
BSFZ application
The certification office for the research allowance checks novelty, technical risk and systematic approach (§ 2 FZulG) and issues a certificate binding for the tax office.
BSFZresearch allowance application (ELSTER)
With the certificate, the company files research allowance application (ELSTER) at the tax office, one annex per fiscal year.
Tax office
How has the cap changed since 2020?
The cap and the contract-research share are tied to fixed cut-off dates, not calendar years.
| Period | Cap | Contract research | Flat rate |
|---|---|---|---|
| Until 30 June 2020 | EUR 2 million | 60 % | none |
| From 1 July 2020 | EUR 4 million | 60 % | none |
| From 28 March 2024 | EUR 10 million | 70 % | none |
| From 1 January 2026 | EUR 12 million | 70 % | 20 % (projects from 2026 only) |
For affiliated companies, the EUR 12 million cap applies to the whole group, not per company (Section 3 (6) FZulG). All state aid for the same project combined must not exceed EUR 15 million (Section 4 (3) FZulG).
Which questions about research allowance facts and figures come up most often?
What the Research Allowance Is Not
Three distinctions that often lead to wrong expectations.
- Not a grant with a limited pool: the research allowance is a legal entitlement (§ 1 FZulG), not a competition for a fixed budget.
- Not a discretionary decision: if a project meets the three criteria under § 2 FZulG, the BSFZ must certify it.
- Not funding for market development or perfecting production: Section 2 (2) FZulG excludes activities that follow only after the product or process has been essentially settled.
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- Research Allowance Report 2026What changed in 2026, in figures
- Funding amountFunding rate, assessment basis and three worked examples.
- How to apply for the research allowanceBSFZ application and research allowance application (ELSTER) step by step.
- Research allowance calculatorAssessment basis and allowance across several years.
- Affiliated companiesHow the EUR 12 million cap is shared across a group.
- PayoutOffset against tax and payout of the surplus.
- Own contributionsEUR 100 per hour: who can claim it and who cannot.
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