Science wastage grows with the amount of science points created by your scientists. The more scientists you got working on one technology the less effective they will become.
While your empire is relatively small and the amount of science points produced is very low, your empire will not experience any science-wastage. Science wastage slowly becomes visible at around 100 science points produced per turn and then gradually rises.
At around 1000 science points produced per turn your empire experiences a science wastage of 33%. However, science wastage never exceeds 40%.
Science wastage was introduced to slow down the research capabilities of huge empires, and giving smaller empires a chance to keep up the research pace.
A common question asked is... “Which comes first? Corruption or Science-Wastage?”
Answer: Note that the corruption is applied at the planet level, then science-wastage is applied after that. Whatever science points are left is counted towards your research.
For completeness sake, here’s the formula how science wastage is calculated:
Science = ROUND(Real-Science-Output * (0.6 + 0.4 / (1+5e-6 * Real-Science-Output^2)))
Science-Wastage = Real-Science-Output - Science