SR&ED and Multiple Small Projects: How to Claim Without Losing Track

Some companies run R&D as one big project each year. Others, especially startups, work on many small, fast-moving initiatives. If you have multiple small projects, you can still claim SR&ED, but you need to organize and document them carefully.

1. How CRA defines a “project”

In SR&ED, a “project” is not just a product or feature — it’s a set of activities aimed at resolving a specific technological uncertainty through a systematic investigation.

• You can have multiple SR&ED projects in a year.
• Each must independently meet CRA’s three-part test: technological uncertainty, systematic investigation, and technological advancement.

2. Risks of having many small projects

• Documentation overload: Each project needs its own technical narrative and evidence. Without clear separation, CRA may reject them.
• Diluted technical depth: Small projects that are minor tweaks or routine engineering may fail the eligibility test.
• Inconsistent tracking: If hours and costs are not assigned to the right project, CRA may disallow them entirely.

3. How to structure multiple projects for SR&ED

Option 1: Group related projects into one claim

• If multiple small initiatives are part of the same broader technical challenge, you can combine them into a single “umbrella” project.
• Example: You run five experiments on different battery cooling methods — treat them as one SR&ED project on “Battery thermal management.”

Option 2: Claim them separately

• If the projects are truly unrelated (e.g., one on machine vision, another on material coating), claim each as its own SR&ED project.
• Ensure each project has its own start/end dates, uncertainties, tests, and results documented.

4. The Top 20 Projects rule

CRA’s T661 form requires you to list only your 20 largest SR&ED projects for the year.

• If you have more than 20, you report the top 20 individually and then aggregate all remaining smaller projects into a single “Other Projects” category.
• The “top 20” is generally determined by cost, but you decide how to group related work before calculating totals.

What this means for you:

• You must still document every single project internally, even if it ends up in “Other Projects.” CRA can request this during a review.
• Grouping related small projects can help more of your work make it into the top 20 list.
• Do not group unrelated projects under one SR&ED “project” just to get them into the top 20 — CRA can reject parts that don’t share the same technological uncertainty.

5. Tracking hours and costs

• Use a central logbook or project management system that tags work to specific projects.
• Assign staff hours to each project weekly or bi-weekly — not retroactively at year-end.
• Keep experiment logs, failed test results, and prototypes tied to each project ID.

6. Example: Consolidating vs. separating projects

Consolidated claim

A robotics startup develops new gripper designs for five product variants. The underlying uncertainty is the same: achieving a specific torque-to-weight ratio in low-temperature environments. The work is grouped into one SR&ED project.

Separate claims

The same startup also experiments with a new autonomous navigation algorithm unrelated to the gripper work. This becomes a separate SR&ED project in the claim.

7. Benefits of grouping small projects

• Less admin work — fewer technical narratives to prepare.
• Stronger claim — CRA sees the bigger picture of the R&D challenge.
• Easier cost allocation — hours from shared staff can be pooled.

The takeaway

Having multiple small projects does not prevent you from claiming SR&ED, but you need to decide whether to combine them under a broader technical objective or keep them separate.

The Top 20 Projects rule means you only detail the largest projects on the T661, but CRA can still ask for evidence for smaller ones.

Smart grouping, consistent documentation, and accurate cost tracking make your claim faster, easier, and more defensible.

SREDSimplify helps startups structure their R&D portfolio so small projects are documented and grouped in the most claim-friendly way.

Try our free pre-screener here: https://sredsimplify.com/

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