SG&A expenses—short for Selling, General, & Administrative—are the lifeblood of business operations, yet they’re often overlooked by Aussie business owners and finance teams. In a year defined by rising costs and evolving tax policy, understanding SG&A is more crucial than ever for staying profitable and compliant in 2025.
What Are SG&A Expenses?
SG&A encompasses the costs that keep a business running but aren’t directly tied to making products or delivering core services. Think of it as the financial backbone: everything from marketing campaigns to office rent, staff salaries (outside direct production), insurance, and software subscriptions falls under this umbrella.
- Selling: Advertising, sales commissions, promotional events, and shipping costs.
- General: Office rent, utilities, administrative wages, and corporate insurance.
- Administrative: Salaries for management, accounting, HR, IT support, and legal fees.
For example, a Melbourne-based e-commerce startup might list Facebook ad spend, warehouse lease payments, and customer service wages all as SG&A. These are essential, recurring, and can quickly add up.
SG&A in 2025: Policy Updates and Economic Pressures
Australian businesses are facing a unique climate in 2025. The ATO has introduced new record-keeping requirements for expense tracking, and there’s heightened scrutiny on discretionary spending amid tighter lending conditions and higher interest rates.
- Digital record-keeping: From July 2025, businesses must digitally store all SG&A receipts and invoices for five years, making cloud-based accounting software a must-have.
- Tax deductibility changes: The 2025-26 Federal Budget introduced caps on entertainment and travel expense deductions, affecting how businesses structure their SG&A budgets.
- Rising wage costs: With the Fair Work Commission’s 2025 wage increase, payroll within SG&A is a bigger slice of the pie for many SMEs.
These updates mean that what you record—and how you categorise it—can have a direct impact on your tax bill and your ability to secure finance.
Managing SG&A for Profitability: Smart Strategies
Efficient SG&A management isn’t just about cutting costs; it’s about strategic allocation and oversight. Here’s how forward-thinking Australian businesses are responding in 2025:
- Embracing automation: AI-powered tools streamline invoice processing and approval workflows, reducing administrative headcount.
- Regular expense audits: Quarterly reviews of SG&A outlays help identify recurring waste—like underused software subscriptions or duplicative admin roles.
- Outsourcing non-core functions: Many firms now contract out payroll, HR, and even sales support to specialist providers, converting fixed costs into scalable variable expenses.
- Scenario planning: With economic uncertainty, businesses are running ‘what if’ forecasts to see how changes in SG&A affect their bottom line and funding options.
Take, for instance, an Australian SaaS company: By shifting from a full-time in-house marketing team to a flexible agency model, they reduced fixed SG&A while gaining access to specialised skills as needed.
The Bottom Line: Why SG&A Deserves Your Attention
In 2025, SG&A isn’t just a line item—it’s a lens for understanding business health, resilience, and agility. Whether you’re a startup founder or CFO at a mid-sized enterprise, tracking and optimising these expenses is essential for thriving in Australia’s competitive market.
