What does 'actual costs' mean under the CRA?

Under the CRA, 'actual costs' refers to the legitimate expenses associated with designing, developing, maintaining, and providing software. These costs can be recovered through donations or fees for technical support without triggering commercial activity status.

For individual maintainers, actual costs include:

• Expenses related to design, development, and maintenance of the software
• Reasonable living expenses — a natural person covering their costs and earning a fair remuneration through support services or donations is not considered to be monetising the software on that basis alone

For legal persons (such as foundations or companies), actual costs include:

• Costs associated with design, development, and provision of the software
• Reasonable compensation for contributors and developers employed by the organisation

The key distinction is that recovering actual costs is not considered commercial activity, while significantly exceeding those costs — particularly with an intention to make a profit — may indicate the software is being supplied in the course of a commercial activity (Recital 15).

This flexibility is important because donations naturally fluctuate over time. Whether someone intends to make a profit should be assessed by considering the broader financial situation over time, not just isolated instances where income temporarily exceeds expenses.

See also: Can a natural person's living expenses count as 'costs' or is that profit? and What does 'make a profit' mean under the CRA?.