Do I need to track employee hours specifically to support an SR&ED claim?

There's no single, universally mandated tracking method that CRA requires by law, but in practice, credible records of the time employees spent on eligible SR&ED activities are close to essential for a claim that will hold up on review. Claims that rely on rough after-the-fact estimates of hours, rather than contemporaneous records kept as the work happened, are a common reason CRA reduces or denies SR&ED claims, since it's difficult to reconstruct convincing time allocations months or years after the fact.

Good practice generally means tracking time as the work is performed, ideally tied to specific eligible projects or activities, alongside the broader technical documentation showing the problem being addressed, the uncertainty involved, and the systematic process followed. This doesn't have to be an elaborate system, but it does need to be genuine and contemporaneous rather than reconstructed later specifically to support a filed claim.

Because time-tracking gaps are one of the more frequent, avoidable weaknesses CRA finds on SR&ED review, building a simple, consistent habit of recording time against eligible work throughout the year, rather than trying to piece it together at filing time, meaningfully strengthens a claim's chances of surviving scrutiny.