When is an expense deductible?
Under s8-1 of the Income Tax Assessment Act 1997, the ATO allows businesses to deduct any expense that satisfies all three of the following conditions. Digital marketing typically meets all three with ease.
Business-purpose nexus
The expense must directly relate to earning assessable income — not personal use.
Apportionment
If an expense has both business and personal components, only the business portion is deductible.
Substantiation
You must hold invoices, receipts, or records proving the expense exists and its business purpose.
Deductible digital marketing expenses
The following are generally fully deductible as operating (revenue) expenses in the financial year you incur them.
SEO services
Monthly retainers, keyword research, on-page and technical optimisation, link building, and SEO audits.
Fully deductible
Google & social ads
All paid media spend — Google Ads, Meta Ads, LinkedIn, YouTube campaigns — plus agency management fees.
Fully deductible
Content creation
Blog writing, copywriting, video production, graphic design, and social media content for your business.
Fully deductible
Website maintenance
Hosting, domain renewal, plugin subscriptions, routine updates, and support that maintains existing functionality.
Fully deductible
Marketing tools & software
Email marketing platforms, CRM subscriptions, analytics tools, and marketing automation software.
Fully deductible
Website builds & redesigns
New websites or major overhauls may be treated as capital expenditure per ATO ruling TR 2016/3. Small business concessions may allow immediate write-off.
May be depreciated
How the ATO treats website costs specifically
The ATO issued a dedicated tax ruling on commercial website expenditure — TR 2016/3 — which provides the clearest guidance on how website costs are classified.
Ongoing costs that maintain your website
Hosting fees, domain registration, plugin licences, and labour costs for updates that maintain the website’s existing look and functionality are all revenue expenses — fully deductible in the year incurred.
Costs that create or significantly improve your website
Building a new website or making major structural improvements that substantially enhance the site’s income-producing capability are capital in nature. These are depreciated over their effective life (typically 5 years for in-house software) — unless the instant asset write-off applies.
💡 $20,000 Instant Asset Write-Off — now permanent
Small businesses with aggregated annual turnover under $10 million can immediately write off eligible assets costing under $20,000 each — in the same year the asset is first used or ready for use. This applies per asset, so multiple assets can be written off in the same year.
Following the 2026–27 Federal Budget, the Government has announced the $20,000 threshold will be made permanent from 1 July 2026 — meaning eligible businesses can plan ongoing investments with certainty, rather than waiting for annual extensions.
GST note: If you’re GST-registered, the $20,000 threshold is exclusive of GST. If not GST-registered, it’s inclusive. Second-hand assets are eligible; structural building works and horticultural plants are excluded. Always confirm eligibility with your registered tax agent.
What’s in — and what’s not
✓ Claimable
✓ SEO retainers and audits
✓ Google Ads & Meta Ads spend
✓ Social media management fees
✓ Blog writing and copywriting
✓ Website hosting and plugins
✓ Email marketing platforms
✓ Business photography and video
✓ Marketing strategy consulting
✓ Analytics and reporting tools
✗ Not claimable
✗ Personal-use portion of mixed expenses
✗ Client entertainment and hospitality
✗ Non-business promotional activities
✗ Expenses without adequate records
✗ Costs with no clear income nexus
✗ Fines or penalties from ad platforms
What records you need to keep
The ATO requires you to hold records for five years from when you lodged your tax return. Bank statements alone are not enough — you need itemised documentation.
⚠️ This page provides general information only and does not constitute tax or financial advice. Tax treatment depends on your individual business structure, turnover, and circumstances. Always consult a registered tax agent or accountant before making decisions. For official guidance, visit ato.gov.au or refer to ATO Ruling TR 2016/3.
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Every dollar you spend with Content Authority on SEO, content, or Google Ads is a legitimate, fully deductible business expense. We’ll help you invest strategically and provide the documentation you need to claim it.
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