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. You can compare this to the “too many cooks in the kitchen” effect...
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 1,000 science points produced per turn and then gradually rises.
At around 1,0000 science points produced per turn your empire experiences a science wastage of 15%. At 30,000 science points per turn science wastage is at 27%. However, science-wastage can never exceed 30%.
Science wastage was introduced to slow down the research capabilities of huge empires, and giving smaller empires a chance to keep up with the research pace.
A common question asked is... “Which comes first? Corruption or Science-Wastage?” Answer: 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 (Empire-Wide-Science-Output is the combined research output of all your planets, with corruption/loyalty modifiers for each planet applied):
