R&D tax credit personnel costs: what counts toward the assessment basis
Eligible is the employer gross wage for the R&D time of a person, not the whole salary. From 2026 a 20 % flat rate is added, for projects starting after 31 December 2025.
- Employer gross wage, proportional to R&D time (§ 3 (1) FZulG)
- From 2026: 20 % flat rate without itemised proof (§ 3 (3b) FZulG)
- GmbH managing directors eligible only via salary
Written by Max Nodes, Founder and Managing Director · 25 of 25 supported BSFZ applications certified (as of 09/2026) · Last updated: · Law as of:
Make research time traceable
Figures and details
Key facts in brief
Eligible are the wages of the people who work on a certified R&D project: the employer gross wage including the employer's share of social security contributions, proportional to the person's R&D time share (§ 3 (1) FZulG). Components subject to payroll tax, such as bonuses or benefits in kind, generally count; severance payments do not, since no R&D time share can be attributed to them. Agency staff are not eligible: the hirer pays the staffing agency, not the temporary worker directly as payroll-tax wages. From 2026 a 20 % overhead flat rate is added, only for projects starting after 31 December 2025 (§ 3 (3b) FZulG). Own contributions by sole proprietors and partners are a separate category at EUR 100 per hour (§ 3 (3) FZulG); this does not apply to a GmbH managing director, whose R&D time counts only through their salary.
The essentials on personnel costs
Which salary components count toward the assessment basis?
Eligible is the employer gross wage for hours worked on the project: gross salary plus the employer's share of social security contributions, to the extent it is tax-free under § 3 no. 62 EStG (§ 3 (1) FZulG).
| Salary component | Counts | Why |
|---|---|---|
| Base salary (gross wages) | yes Yes | Central component, wages under § 3 (1) FZulG. |
| Employer's share of social security contributions | yes Yes | Tax-free future provision under § 3 no. 62 EStG, increases the assessment basis by about 20 % over gross salary alone. |
| Contractually agreed allowances, such as shift or function allowances | yes Yes | Contractually fixed, counts like base salary (§ 3 (1) FZulG). |
| Performance bonuses beyond base salary | Case by case | Pay subject to payroll tax generally counts (§ 3 (1) FZulG); whether it is attributable to the R&D time share is a matter for the tax adviser. |
| 13th salary, holiday and Christmas pay | yes Yes | Contractually or collectively agreed, counts like base salary (§ 3 (1) FZulG). |
| Benefits in kind: company car, job ticket, meal subsidy | Case by case | A non-cash benefit subject to payroll tax generally counts (§ 3 (1) FZulG); confirm the specific case with your tax adviser. |
Time outside the project is not eligible: only the employer gross wage for hours on the certified R&D project counts toward the assessment basis, proportional to the person's R&D time share (§ 3 (1) FZulG). How to document that share is on the time tracking page.
Which personnel costs are eligible?
Eligible is the employer gross wage, not every salary component. The overview of salary components is above; here two further special cases and the flat rate from 2026.
| Salary component | Eligible | Reference |
|---|---|---|
| Severance payments | No | § 3 (1) FZulG (not covered) |
| Employer contributions to company pensions | No, only statutory future provision counts | § 3 (1) FZulG in conjunction with § 3 no. 62 EStG |
The 20 % flat rate from 2026
For projects started after 31 December 2025, a 20 % overhead flat rate is added to the total eligible expenditure under § 3 (1) to (4), including personnel costs, without itemised proof (§ 3 (3b) FZulG). For retroactive claims for 2020 to 2025, only gross wages plus the employer's social security share count.
GmbH managing directors: only via salary
The remuneration of a GmbH managing director counts toward personnel costs if there is an employment contract subject to payroll tax (§ 3 (1) sentence 3 FZulG); describing the R&D share in the contract is useful evidence in practice, though not a statutory requirement. They cannot claim an own contribution under § 3 (3) FZulG; that applies only to sole proprietors and partners.
How do you determine a person's R&D share?
Only the share of working time spent on the certified project is eligible. Two methods are permitted.
Track time by project
Employees record daily or weekly which hours go to which project. GoBD-compliant means recorded promptly, unalterable and traceable.
EmployeesUse a digital tool
Clockify, Toggl or the existing ERP system record the hours per project and person and produce audit-proof documentation.
YouAlternative: plausible estimate
Without time tracking, the share can be estimated from job descriptions, project plans or org charts, for example 60 % R&D time. The tax office may question the estimate.
Us with you
Details on GoBD-compliant documentation are on the time tracking page.
Which people count as personnel costs?
Five groups come up in practice. Only two of them can also claim an own contribution.
| Group | Counts as | Reference |
|---|---|---|
| Employees with R&D work | Personnel costs via salary, proportional to R&D time | § 3 (1) FZulG |
| GmbH shareholder-managing director | Personnel costs via salary only, no own contribution | § 3 (1) FZulG |
| Sole proprietor | Own contribution, EUR 100 per hour, at most 40 hours per week | § 3 (3) FZulG |
| Partner (GbR, OHG, KG, GmbH & Co. KG) | Activity remuneration, capped at EUR 100 per hour | § 3 (3) FZulG |
| Freelancers without an employment contract | Not personnel costs; claimable as contract research if you commission the project | § 3 (1), § 3 (4) FZulG |
How does a sole proprietor's own contribution turn into an allowance?
A sole proprietor claims R&D hours at EUR 100 per hour, capped at 40 hours a week (§ 3 (3) FZulG).
Sole proprietor with an own contribution
A sole proprietor researches 20 hours a week on further developing their product, 920 hours over the year.
EUR 100 per hour, capped at 40 hours per week (§ 3 (3) FZulG).
The full path from the assessment basis to the paid-out allowance is on the calculation page.
Which questions come up most often about personnel costs?
How does a time share turn into an allowance?
From the R&D-weighted personnel costs, the flat rate from 2026 and the funding rate produce the allowance paid out.
SME with personnel costs, project from 2026
An SME with EUR 298,200 in eligible personnel costs from five R&D employees, project starts after 31 December 2025.
Includes the 20 % flat rate on the assessment basis (§ 3 (3b) FZulG).
Same personnel costs, 2024/2025 period
The same EUR 298,200 in personnel costs, but expenses incurred in the 2024/2025 period.
Without the 20 % flat rate, which only applies from 2026.
Personnel costs fully captured before you file the BSFZ application
In the first consultation we work through your assessment basis: personnel costs, R&D share, own contributions and the new flat rate. Success-based, no upfront costs.
Book a first consultationRead on
- R&D tax credit: the calculationFrom the assessment basis through the funding rate to the allowance paid out.
- Own contributions to the R&D tax creditThe EUR 100 rule for sole proprietors and partners in detail.
- Sole traders and partnersWhy own contributions only count for these legal forms, not the GmbH.
- R&D time trackingGoBD-compliant documentation of the R&D time share, step by step.
- Contract researchHow external development contracts feed into the assessment basis.
- Check your SME statusWhy SMEs get 35 % instead of 25 % and how the classification works.
- R&D tax credit calculatorCalculate the assessment basis and allowance from your personnel costs.
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