Every year, small business owners spend money on websites, online marketing, and SEO to grow their businesses. Many then forget to claim these expenses, claim them incorrectly, or avoid claiming them altogether. Whether you’re a tradie, consultant, retailer, or provide SEO services for accountants and bookkeeping practices, the same principle applies. Managing SEO at tax time correctly helps you treat these costs as legitimate business expenses. The question is whether you’re treating them that way.
Here’s what tends to go wrong, and how to think about it more clearly before EOFY.
SEO Is a Business Expense, Not a Personal One
This sounds obvious, but it’s where a lot of confusion starts. Some small business owners aren’t sure whether SEO and digital marketing costs count as “real” business expenses in the ATO’s eyes, or whether they sit in a grey area. That’s one reason many businesses seek professional guidance through SEO for accountants to better understand how marketing investments fit within their overall financial strategy.
They don’t. If you’re paying for SEO services, a marketing consultant, Google Ads, or content writing to help your business earn income, those costs are generally deductible as ordinary business expenses. The same applies to website hosting, domain registration, and any software subscriptions you use to manage your online presence.
The ATO’s position is straightforward: if an expense is incurred in earning assessable income and isn’t of a private or capital nature, it’s generally deductible. SEO fits that description cleanly for most businesses.
Things become more complicated when costs include both business and personal elements or qualify as capital expenses. More on that below.
The Mistake: Treating the Website as a One-Off Capital Cost
Many small business owners incorrectly treat all website costs as capital expenses instead of claiming immediate deductions.
It’s not that simple. The ATO distinguishes between:
Capital costs – building a brand new website from scratch, or a significant redesign that substantially changes what the site does. These are typically treated as capital expenditure and depreciated.
Revenue costs – ongoing maintenance, content updates, monthly SEO retainers, hosting fees, and marketing campaigns. These are generally deductible in the year they’re incurred.
If you pay a monthly retainer to an SEO agency, you can usually claim it this financial year. A $15,000 website rebuild requires different tax treatment, so discuss the appropriate approach with your accountant.
The practical takeaway: don’t assume your SEO spend is capital just because it relates to your website. Ongoing marketing costs are typically revenue expenses.
The Mistake: Not Keeping Records of What You’ve Spent
The ATO doesn’t just want you to claim the right things. It wants you to be able to prove it.
Many small business owners pay for SEO, Google Ads, or digital marketing through business cards or bank transfers. They often forget those expenses after making the payment. Receipts remain in inboxes, invoices get buried, and owners lose track of their spending by June 30.
Good record-keeping doesn’t need to be complicated. For digital marketing expenses, you want:
- Invoices or receipts from every provider
- A clear note of what the service was for (e.g. “monthly SEO retainer, April 2025”)
- Bank or credit card statements that match
If you use accounting software, linking your business card and tagging marketing expenses as they come in is one of the simplest habits you can build. It takes thirty seconds per transaction and saves hours at tax time.
The Mistake: Missing Deductions Because SEO Feels Intangible
Unlike buying a piece of equipment you can touch, SEO can feel abstract. Rankings, traffic, impressions, none of it shows up in a physical form. Some business owners unconsciously treat it as less “real” than other expenses, and that hesitation can mean leaving legitimate deductions on the table.
To be clear: the intangible nature of a service has no bearing on whether it’s deductible. What matters is whether the expense was incurred in running your business.
If you hire an SEO consultant or agency to help your business get found online and win more clients, you can deduct that expense just like your electricity bill. It doesn’t matter that you can’t hold the result in your hands.
This applies to a wide range of digital marketing costs that business owners sometimes overlook:
- SEO agency retainers and one-off audits
- Copywriting and content creation for your website
- Link building campaigns
- Local SEO setup and management
- Google Business Profile optimisation services
- Keyword research tools and SEO software subscriptions
If it’s being used to help your business earn income, it belongs in your expense records.
The Mistake: Not Investing in SEO at All Because of the Cost
This one isn’t strictly a tax mistake, but it shows up at tax time anyway. When business owners see what a proper SEO engagement costs, the reflex is sometimes to pull back. What doesn’t always get factored in is that a meaningful portion of that cost is effectively subsidised by the tax deduction.
If you’re operating as a company paying the small business tax rate of 25%, a $1,000 monthly SEO retainer is effectively costing you $750 after tax. If you’re a sole trader on a higher marginal rate, the subsidy is even larger.
That doesn’t mean SEO is free, or that the tax benefit alone justifies any spend. But it’s a relevant consideration when weighing up whether the investment makes sense. Businesses often recover more deductions after hiring SEO specialists or niche accountant-focused SEO providers. Many owners underestimate these deductible costs until they review them with their accountant.
A Simple EOFY Checklist for Digital Marketing Expenses
Before June 30, it’s worth running through these:
- Have you collected all invoices from your SEO agency, web developer, and any marketing tools?
- Do you clearly understand which costs qualify as revenue expenses and which require capital depreciation over time?
- Have you checked that your Google Ads, social media advertising, and content costs are captured in your records?
- If you run your business from home and manage some of your own digital marketing, have you considered the home office deduction for that time?
- Have you spoken to your accountant about the instant asset write-off if you’ve purchased any software or tools above the usual threshold?
None of these requires a specialist. They just require treating your digital marketing spend with the same rigour you’d apply to any other business cost.
The Bottom Line
SEO isn’t a mystery expense that lives outside the normal rules of business taxation. It’s a marketing cost, it’s generally deductible, and it deserves the same record-keeping attention as anything else you claim.
If you’ve been vague about what you’ve spent on getting found online, EOFY is a good time to tighten that up. Gather your invoices, understand which costs are revenue versus capital, and make sure your accountant has the full picture. The ATO won’t know you forgot to claim it. But your bottom line will.