Your SR&ED consultant’s invoice arrives every year. You look at it. You wince. You pay it. And you move on.
But have you done the math on what that relationship actually costs over 5 years? Over 10?
Most Canadian tech companies paying SR&ED consultant fees have never compared the total cost of their current approach against the alternatives. The consultant relationship feels safe. It’s known, it works, someone else handles the headache. But “known” and “optimal” aren’t the same thing.
This is a straightforward analysis of what SR&ED consultants charge, what you get for the money, where the model breaks down for tech companies, and what’s changed that makes the comparison worth revisiting.
How SR&ED Consultant Fees Work
SR&ED consultants typically charge a percentage of the total claim value. They only get paid if you get paid. Sounds fair. The details matter more.
Fee Structures in the Market
| Consultant Type | Typical Fee Range | How It Works |
|---|---|---|
| Big 4 / National firms | 15-25% of claim | Established SR&ED practices. Higher minimum thresholds. Premium pricing for brand and audit defense. |
| Mid-size SR&ED specialists | 15-30% of claim | Dedicated SR&ED firms. Most common for tech companies with 25-50 employees. |
| Boutique / independent | 20-35% of claim | Solo practitioners or small firms. Higher percentage on smaller claims. |
| Accounting firms with SR&ED | 15-25% of claim | Often bundled with your accounting engagement. Convenient but may lack deep technical expertise. |
What the Percentages Actually Cost
For a Canadian tech company with 25-50 employees and 5+ developers, the typical annual SR&ED claim falls between $100K and $400K.
| Annual Claim Size | At 15% Fee | At 20% Fee | At 25% Fee | At 30% Fee |
|---|---|---|---|---|
| $100,000 | $15,000 | $20,000 | $25,000 | $30,000 |
| $150,000 | $22,500 | $30,000 | $37,500 | $45,000 |
| $200,000 | $30,000 | $40,000 | $50,000 | $60,000 |
| $300,000 | $45,000 | $60,000 | $75,000 | $90,000 |
| $400,000 | $60,000 | $80,000 | $100,000 | $120,000 |
A $200K claim at a 25% fee costs you $50,000 per year. That’s a senior developer’s compensation. Every year.
The 5-Year View
SR&ED claims are annual. So is the consultant fee. This cost recurs and compounds.
| Annual Claim | Fee Rate | Annual Fee | 5-Year Total | 10-Year Total |
|---|---|---|---|---|
| $200,000 | 20% | $40,000 | $200,000 | $400,000 |
| $200,000 | 25% | $50,000 | $250,000 | $500,000 |
| $300,000 | 20% | $60,000 | $300,000 | $600,000 |
| $300,000 | 25% | $75,000 | $375,000 | $750,000 |
On a $200K annual claim at 25%, you’ll pay your consultant half a million dollars over 10 years.
What You Get for the Money
SR&ED consultants provide real value. Being honest about that matters before discussing alternatives.
What a Good Consultant Does
Retrospective interviews. The consultant meets with your engineering team to discuss the previous year’s projects, identifying qualifying work and gathering details for technical narratives.
Technical narrative writing. The consultant drafts the documentation CRA requires: project descriptions, evidence of technological uncertainty, systematic investigation, and technological advancement.
Claim preparation. The consultant compiles the T661 form, calculates eligible expenditures, and prepares the filing package.
Filing and submission. The consultant submits the claim as part of your corporate tax return.
Audit support. If CRA selects your claim for review, the consultant handles inquiries and documentation.
Where Consultants Earn Their Fee
For companies that have never filed SR&ED, a good consultant is genuinely valuable. They know the program. They know what CRA looks for. They can identify qualifying work that an inexperienced filer would miss.
Audit defense is another area where consultants provide real value. An experienced consultant who has handled CRA reviews knows how to respond effectively.
The question isn’t whether consultants provide value. They do. The question is whether 15-30% of your claim, every year, forever, is the right price for that value.
Where the Consultant Model Breaks Down for Tech Companies
The SR&ED consulting industry was built for manufacturing, life sciences, and traditional R&D. For software companies, the model has structural problems.
Retrospective interviews are fundamentally flawed
The entire consultant model depends on engineers accurately recalling technical details from 6-12 months ago.
This doesn’t work well. Engineers context-switch constantly. They work on multiple projects. They solve problems, move on, and forget details within weeks. Asking a developer in March to describe the architectural uncertainty they faced the previous June produces a rough approximation, not a detailed record.
Engineering time is hidden but massive
Retrospective interviews cost 4-8 hours per engineer. For a team of 10 developers, that’s 40-80 hours. A full engineering sprint, gone.
This cost rarely shows up in the SR&ED ROI calculation. The consultant quotes their percentage fee, and that’s what everyone focuses on. But the engineering time has a real cost in delayed roadmap items, disrupted sprints, and developer frustration.
The fee scales linearly with success
As your company grows, your R&D spend grows, and your SR&ED claim grows. The consultant’s percentage stays the same, meaning their fee increases linearly with your success.
But the work doesn’t increase linearly. A $300K claim doesn’t require twice the consultant effort of a $150K claim. You pay more because the claim doubled, not because they did twice the work.
Under-claiming is built into the process
Retrospective interviews only capture what engineers remember. The longer the gap between doing the work and documenting it, the more qualifying work gets missed.
If your team ran performance optimization experiments in April and the interview happens in January, those experiments are likely forgotten. The work qualified. The documentation doesn’t capture it. Your claim is smaller than it should be.
The Software Alternative
SR&ED documentation software changes the economics fundamentally.
Instead of reconstructing documentation after the fact, software connects to your development tools (GitHub, GitLab, Jira, Linear) and captures qualifying work as it happens. AI analyzes commits, pull requests, and tickets against CRA’s eligibility criteria continuously. Technical narratives are generated from actual development data, not from interviews.
The Cost Comparison
| Traditional Consultant | SR&ED Software | |
|---|---|---|
| Annual cost | $20,000 - $100,000+ (15-30% of claim) | Flat subscription ($5K-$15K/year) |
| Cost predictability | Varies with claim size | Fixed, known in advance |
| Engineering time | 40-80 hours/year in interviews | Zero |
| Documentation quality | Based on 6-12 month old memories | Based on actual development data |
| Qualifying work captured | What engineers remember | Everything in your dev tools |
| Scales with growth | Fee increases with claim size | Subscription stays flat or grows modestly |
Running the Numbers
Take a company with a $200K annual SR&ED claim and a consultant charging 25%.
Consultant cost per year: $50,000 (fee) + ~$25,000 (engineering time at $50/hour x 80 hours) = $75,000 total cost
Software cost per year: ~$10,000 (subscription) + $0 (engineering time) = $10,000 total cost
Annual savings: $65,000. Over 5 years: $325,000.
And that doesn’t account for the larger claim that continuous capture typically produces. If software catches 10-20% more qualifying work, the entire increase goes to you.
When a Consultant Still Makes Sense
First-time filers. If you’ve never filed SR&ED, a consultant provides valuable guidance on the program and eligibility assessment.
Active CRA audits. If you’re currently being audited, your consultant’s experience with CRA has real value.
Complex multi-entity structures. Companies with multiple Canadian entities or complex expenditure allocations may benefit from consultant expertise.
The hybrid approach. Some companies use software for documentation and keep their consultant for filing and audit support. The consultant’s fee drops significantly because documentation (60-70% of the work) is already done.
The Bottom Line
SR&ED consultants built an industry on the premise that SR&ED documentation is too complex for companies to handle themselves. For decades, that was true.
That premise no longer holds. Software can connect to your development tools, identify qualifying work, and produce CRA-ready documentation in minutes, with zero engineering time, at a fraction of the cost.
The consultant model isn’t broken. It’s just expensive for what it delivers. And for the first time, there’s an alternative that costs less, captures more, and gives you back the engineering hours you’ve been losing every year.
Want to see how much your company could save? Talk to our team about automating your SR&ED documentation.