Budget 2026 introduced a practical simplification for R&D staff costs. But how does it work in reality? We asked Brenda Donohoe, Regional Sales Director at ABGi Ireland, to explain the new 95% rule and what it means for everyday compliance.

Q | So, Brenda, what is the 95% rule?

Basically, if an employee spends at least 95% of their time on qualifying R&D activities, you can treat 100% of their salary and related costs as qualifying expenditure.

What this does is remove the need for detailed apportionment for employees who are almost fully dedicated to R&D work.

Q | Why is this considered a significant simplification?

I think the reason it’s so welcome is because, historically, even staff who were effectively full-time R&D engineers still required detailed time apportionment. That meant granular timesheets and retrospective analysis, which added administrative pressure. The 95% rule reduces that burden for clearly R&D-focused roles.

Q | Does this mean companies can relax their time tracking?

I wouldn’t go that far! You still need to be able to demonstrate that the 95% threshold is genuinely met. That might involve job descriptions, project allocations, organisational charts, or appropriate tracking systems.

In practice, we often assist companies in implementing real-time tracking solutions and setting up internal systems that ensure accuracy as projects progress, rather than trying to reconstruct time at year-end.

And where someone falls below 95%, normal apportionment rules still apply.

Q | What’s the risk if this isn’t handled properly?

I’d say the main risk is assuming the simplification means less scrutiny. Revenue is paying closer attention to staff cost allocations, so the documentation still needs to be proportionate, accurate and defensible. The simplification definitely helps, but it doesn’t remove the need for care, due diligence and robust internal controls.

We hope Brenda’s insights have been helpful – If you’d like some help to identify which roles can use the 95% simplification and which still require apportionment, please get in touch with ABGi Ireland.  We are one of Ireland’s trusted and leading R&D consultancies, with a proven track record of preparing compliant claims that stand up to Revenue scrutiny. We help companies implement practical, real-time tracking systems and robust internal processes that deliver accuracy without over-burdening technical teams.