Quick answer: Fraction of time is the percentage of an employee’s working time spent directly on qualifying R&D or qualifying indirect activities in an accounting period. It is applied to the employee’s total relevant staff cost, including salary, employer NIC, pension and qualifying expenses, to produce the qualifying staff cost included in the R&D claim.
What is fraction of time?
Fraction of time is the percentage of an individual employee's working time that is spent directly on qualifying R&D or qualifying indirect activities in an accounting period. The fraction is applied to the employee's total relevant staff cost, including gross salary, employer National Insurance contributions, employer pension contributions and qualifying reimbursed expenses, to produce the qualifying staff cost element of the R&D claim. HMRC accepts a range of evidence including timesheets, project-time systems and supported estimates.
How does HMRC define fraction of time?
HMRC's guidance on time apportionment for staff costs is at CIRD83000 of the CIRD Manual, with practical examples at CIRD83200. HMRC expects contemporaneous or near-contemporaneous evidence, though reasonable estimates supported by project records, diaries or line-manager sign-off are accepted where formal timesheets are not available.
What does a fraction-of-time calculation look like in practice?
A senior engineer on a £90,000 gross salary plus £12,000 employer NIC and pension spends 70% of her time on a qualifying R&D project across the year. Her fraction of time is 0.70, applied consistently across all relevant cost lines. The qualifying staff cost is 0.70 times £102,000, which equals £71,400, and appears in the staff cost category of the R&D claim alongside similar apportioned figures for other team members supporting the project. The free eligibility calculator can help estimate how apportioned staff costs like this feed into an overall claim.
Related terms
Frequently asked questions
Fraction of time is the percentage of an individual employee’s working time spent directly on qualifying R&D or qualifying indirect activities in an accounting period, applied to their total relevant staff cost to produce the qualifying staff cost element of the claim.
HMRC accepts a range of evidence including timesheets, project-time systems and supported estimates. Contemporaneous or near-contemporaneous evidence is expected, though reasonable estimates backed by project records, diaries or line-manager sign-off are accepted where formal timesheets are not available.
The fraction is applied consistently across the employee’s total relevant staff cost, including gross salary, employer National Insurance contributions, employer pension contributions and qualifying reimbursed expenses.