Accounting and tax for Shopify sellers.
You can generally claim your Shopify subscription, apps, advertising and inventory costs against your store's income, provided each one relates to earning it and you keep the records. This guide covers what Shopify sellers typically claim, how GST applies across domestic and export sales, and how we reconcile payouts properly instead of just booking the deposit. We're Brisbane based and work with Shopify store owners right across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What shopify sellers can claim.
Ordered by typical value. Every claim still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
Advertising and marketing spend
Meta and Google ad spend, along with influencer and affiliate costs, are generally deductible and are usually the largest cost after stock for a growing Shopify store.
Inventory and landed cost of stock
The cost of the stock you buy or manufacture, including freight and duty to get it into Australia, generally forms part of your cost of goods sold rather than a straight upfront deduction, and needs to be tracked properly against what you've actually sold.
Shopify subscription and app fees
Your platform subscription and the apps you run for reviews, email marketing, upsells and other store functions are generally deductible as ongoing running costs.
Payment gateway and transaction fees
Fees charged by Shopify Payments, Stripe or other payment processors on each sale are generally deductible.
3PL and fulfilment costs
Warehouse storage, picking and packing fees paid to a third-party logistics provider are generally deductible as a cost of getting orders out the door.
Packaging and shipping supplies
Boxes, mailers, packing materials and postage are generally deductible.
Website theme, design and development
Costs to build or improve your store's theme and functionality are generally deductible, either upfront or depreciated depending on the nature and cost of the work.
Email and SMS marketing software
Subscriptions to tools like Klaviyo or similar platforms used for customer retention and campaigns are generally deductible.
Accounting, bookkeeping and connector software
Fees for your accounting support, plus reconciliation tools that connect Shopify payouts to Xero, are generally deductible.
GST and BAS, done right.
Sales to Australian customers through your Shopify store are generally taxable, so once you're registered you charge GST and remit it, while sales you export to customers overseas are generally GST-free. Getting this split right in your tax codes matters as soon as you have any meaningful international order volume.
Where it gets more complex is low-value imported stock and how GST applies depending on where your inventory sits and how it's sold, since the rules differ from a straightforward domestic sale of Australian-held stock. Worth a conversation with us if you're importing stock directly to fulfil orders rather than holding it locally.
Shopify payouts land in your bank account net of fees, refunds and any reserve held back, so booking the deposit as your revenue understates sales and overstates your fee costs, or just leaves the numbers not meaning much. A connector like A2X breaks each payout back into gross sales, fees, refunds and GST so your Xero file reflects what actually happened, not just what hit the bank.
The right structure for the work.
Plenty of Shopify sellers start as a sole trader while validating a product and building initial sales, which is simple while stock levels and profit are still modest. Once you're carrying meaningful inventory value, reinvesting profit into growth, or bringing on a co-founder, a company structure usually starts to make more sense for the asset protection and how profit can be distributed. It's worth revisiting as your stock investment and revenue grow rather than only at tax time.
Run the work, we run the numbers.
A2X or a similar connector is the single biggest lever for clean Shopify books, since it turns each payout into properly categorised sales, fees, refunds and GST inside Xero. Pair that with inventory software like Cin7 or Unleashed once you're carrying real stock levels, and you get a true per-SKU margin instead of a guess based on bank balance.
Frequently asked questions.
How do I account for Shopify payouts in Xero?
Through a connector like A2X, which splits each payout back into gross sales, fees, refunds and GST rather than you booking the net deposit as revenue. We set this up at onboarding so it runs automatically from then on.
Do I charge GST on orders shipped overseas?
Generally no. Exported sales to overseas customers are typically GST-free, while domestic sales to Australian customers are generally taxable once you're registered. We map your Shopify tax settings to reflect this properly.
What can I claim for advertising spend?
Meta, Google and other advertising costs used to drive traffic and sales to your store are generally deductible, and for most growing stores this is the largest expense after stock itself.
How does landed cost work for imported stock?
The purchase price of your stock plus freight and duty to bring it into the country generally forms your landed cost, which sits in cost of goods sold rather than as a separate deduction. Getting this tracked properly per shipment is what makes your margin numbers trustworthy.
When should I move from sole trader to a company?
Usually once you're carrying real inventory value, reinvesting profit rather than drawing it all out, or bringing in a partner. Below that, sole trader is often the simpler and cheaper option while you're still proving the business out.
Talk to an accountant who knows Shopify seller businesses.
Fixed monthly fees, unlimited access, 510+ five-star reviews. The first chat costs nothing - 07 3899 8311.
Or call 07 3899 8311.