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Engineering & Manufacturing

Industrial / mechanical engineering - R&D Tax Benchmark

What proportion of total business expenses do Australian industrial / mechanical engineering typically claim as R&D under the RDTI?

Typical range
3–12%
Direct (core) R&D as % of expenses
Elevated but plausible
up to 25%
Still defensible with strong evidence
Unusual - review carefully
> 40%
May still be valid; expect AusIndustry scrutiny
Supporting R&D
1–6%
Indirect / supporting activities

What drives R&D intensity in this sector

Project-based, with R&D concentrated in prototyping and validation phases.

Sector disclaimer

Routine detailed engineering is excluded. Eligible activity centres on genuinely novel mechanisms or first-of-kind builds.

ATO & AusIndustry context

Standard engineering design from established principles is not eligible (AusIndustry sector guidance).

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More benchmarks in Engineering & Manufacturing

Educational benchmark only - not an eligibility test or tax advice. Final eligibility depends on whether your activities meet the s.355-25 / s.355-30 core and supporting R&D definitions and is determined by AusIndustry on registration.