Marketing your small business today looks a lot different than it did even a decade ago. Gone are the days when your only options were newspaper ads, cold calls, or radio jingles. Today, marketing is more digital, more data-driven, and—thankfully, often more affordable.
As a professional bookkeeper who works with small businesses across Canada, I’m often asked: “Can I write off this type of marketing expense?” The good news is that in most cases, yes—you can! But as with everything related to taxes, there are rules to follow, and a few exceptions you should be aware of.
Let’s explore the kinds of marketing and advertising expenses that are deductible for your Canadian small business, how to account for them properly, and how to make the most of your marketing dollars.
Traditional vs. Modern Advertising: What’s Changed?
In the past, business owners invested heavily in TV, radio, and print media—big-ticket items that were difficult to measure and often out of reach for newer businesses. Today, many marketing tools cost nothing but time. You can run targeted ads on Facebook or Google for just a few dollars a day or build an organic following on Instagram or LinkedIn by posting valuable content regularly.
With digital marketing, the advantage isn’t just cost—it’s measurability. You can track how many people saw your ad, clicked through to your website, or signed up for your newsletter. This gives you insight into what’s working so you can refine your strategy.
Advertising Expenses You Can Deduct
Most advertising costs are deductible if they’re reasonable and incurred to earn business income. Common examples include:
- Print ads in newspapers and magazines (with some CRA caveats, explained below)
- TV or radio commercials aimed at the Canadian market
- Online ads on platforms like Google, Facebook, Instagram, Pinterest, TikTok, Etsy, or Amazon
- Sponsored content on blogs or influencer channels
📌 Important Tax Tip: If you’re purchasing advertising from a foreign digital platform (like Google or Facebook), and you’re registered for GST/HST or QST, make sure to provide your tax number. Many of these platforms are now required to charge sales tax if they exceed $30,000 in sales to Canadians—but if you provide your registration number, you can often avoid being charged unnecessary tax that you won’t be able to claim back on your GST return.
Website and Digital Marketing Costs
Your website is one of your most powerful marketing tools, and most related costs are deductible:
- Website hosting and development fees
- Search Engine Optimization (SEO) services
- Domain name registration
- Website builders (e.g., Wix, Squarespace)
- Email marketing platforms like Mailchimp or Mailer Lite
💡 Bookkeeping Tip: If you’ve spent more than a few hundred dollars on website development, it may need to be capitalized as an asset rather than expense. These costs would be depreciated over time (usually in CCA Class 10 or 12). Your bookkeeper or accountant can help you decide how to classify it.
Promotional Materials
You can also deduct costs related to branded materials that help promote your business, such as:
- Business cards
- Flyers and brochures
- Branded giveaways (mugs, pens, tote bags, T-shirts)
- Product samples
Conferences and Trade Shows
Attending a conference or trade show can be a great way to market your business. These costs are generally deductible, including:
- Booth or table rental
- Travel costs (airfare, accommodation)
- Meals while at the event (note: meals are only 50% deductible)
If meals are included in the conference fee, they need to be separated out and only half can be claimed.
Creative and Design Services
You can deduct amounts paid to creative professionals and platforms that help bring your brand to life:
- Logo design
- Graphic design for flyers or social media
- Freelancers from Fiverr or Upwork
- Subscriptions to software like Canva Pro or Adobe Creative Cloud
Other Deductible Marketing Costs
Here are a few more deductible items that often get overlooked:
- Store signage
- Social media management services
- Affiliate or influencer commissions
- Brand development or sponsorship of events
- Salaries and commissions paid to marketing staff or salespeople
- Client gifts, if they meet CRA requirements (usually limited in amount and purpose)
- Meals and entertainment, if used to discuss business (only 50% deductible)
How to Track Marketing Expenses in Your Books
Marketing and advertising expenses should appear in the Operating Expenses section of your Income Statement (Profit & Loss report). Your chart of accounts should be organized to help you understand where your money is going and what’s working.
Here’s a sample breakdown you might use:
- Advertising (possible further breakdown: Print, Digital, Social Media)
- Conferences & Trade Shows
- Promotional Materials
- Travel (for marketing-related trips)
- Meals & Entertainment
- Marketing Salaries & Commissions
- Website & Online Services
📌 Xero Tip: You can also use tracking categories to separate marketing costs by product, campaign, or location. This makes it easier to evaluate the return on different strategies.
CRA Restrictions on Advertising Deductions
Most advertising expenses are deductible—but there are a few exceptions, especially when it comes to foreign or print media:
- If your ad is in a Canadian magazine or newspaper that contains at least 80% original editorial content, the full cost is deductible.
- If the original content is less than 80%, you can only deduct 50%.
- Foreign broadcast ads (TV or radio directed at Canadian audiences) are not deductible.
Always check with your bookkeeper or accountant if you’re unsure whether a specific ad meets CRA guidelines.
Final Thoughts: Market Smart and Stay Organized
Marketing is essential to growing your business, but it doesn’t have to be expensive or confusing. Whether you’re investing in Facebook ads, handing out flyers, or attending a trade show, most of your advertising and promotional costs are tax-deductible in Canada—if you document them properly and meet CRA criteria.
If you’re unsure about whether something qualifies, or how to track it in your books, don’t hesitate to reach out to a professional bookkeeper (like me!) who understands small business needs.
Smart marketing can help you grow—and smart bookkeeping can help you make it count at tax time.
