diff --git a/src/v/pandaproxy/schema_registry/store.h b/src/v/pandaproxy/schema_registry/store.h
index f57a411b9edd8..c18d28e5a7df9 100644
--- a/src/v/pandaproxy/schema_registry/store.h
+++ b/src/v/pandaproxy/schema_registry/store.h
@@ -323,7 +323,7 @@ class store {
         std::vector<schema_id> has_ids;
         for (const auto& s : _subjects) {
             for (const auto& r : s.second.versions) {
-                if (absl::c_binary_search(ids, r.id)) {
+                if (!r.deleted && absl::c_binary_search(ids, r.id)) {
                     has_ids.push_back(r.id);
                 }
             }
@@ -333,8 +333,8 @@ class store {
 
     bool subject_versions_has_any_of(const std::vector<schema_id>& ids) {
         return absl::c_any_of(_subjects, [&ids](const auto& s) {
-            return absl::c_any_of(s.second.versions, [&ids](const auto& v) {
-                return absl::c_binary_search(ids, v.id);
+            return absl::c_any_of(s.second.versions, [&ids, &s](const auto& v) {
+                return !s.second.deleted && absl::c_binary_search(ids, v.id);
             });
         });
     }
diff --git a/src/v/pandaproxy/schema_registry/test/delete_subject_endpoints.cc b/src/v/pandaproxy/schema_registry/test/delete_subject_endpoints.cc
index c98eb0a3ca17e..b4db03bd3e9c9 100644
--- a/src/v/pandaproxy/schema_registry/test/delete_subject_endpoints.cc
+++ b/src/v/pandaproxy/schema_registry/test/delete_subject_endpoints.cc
@@ -177,7 +177,7 @@ FIXTURE_TEST(test_delete_referenced_subject, pandaproxy_test_fixture) {
     }
 
     {
-        info("Delete subject int-key, expect failure 42206");
+        info("Delete subject int-key, expect failure 42206 (still referenced)");
         auto res = delete_subject(client, pps::subject{"int-key"});
         BOOST_REQUIRE_EQUAL(
           res.headers.result(),
@@ -193,24 +193,7 @@ FIXTURE_TEST(test_delete_referenced_subject, pandaproxy_test_fixture) {
     }
 
     {
-        info("Delete subject int-key");
-        auto res = delete_subject(client, pps::subject{"int-key"});
-        BOOST_REQUIRE_EQUAL(
-          res.headers.result(),
-          boost::beast::http::status::unprocessable_entity);
-        BOOST_REQUIRE_EQUAL(get_body_error_code(res.body), 42206);
-    }
-
-    {
-        info("Permanantly delete subject reference-key");
-        auto res = delete_subject(
-          client, pps::subject{"reference-key"}, pps::permanent_delete::yes);
-        BOOST_REQUIRE_EQUAL(
-          res.headers.result(), boost::beast::http::status::ok);
-    }
-
-    {
-        info("Delete subject int-key");
+        info("Delete subject int-key (not referenced - soft deleted)");
         auto res = delete_subject(client, pps::subject{"int-key"});
         BOOST_REQUIRE_EQUAL(
           res.headers.result(), boost::beast::http::status::ok);
diff --git a/src/v/pandaproxy/schema_registry/test/sharded_store.cc b/src/v/pandaproxy/schema_registry/test/sharded_store.cc
index 5ff505709145d..0687ee3f3bdf6 100644
--- a/src/v/pandaproxy/schema_registry/test/sharded_store.cc
+++ b/src/v/pandaproxy/schema_registry/test/sharded_store.cc
@@ -66,6 +66,26 @@ SEASTAR_THREAD_TEST_CASE(test_sharded_store_referenced_by) {
     BOOST_REQUIRE(
       store.is_referenced(pps::subject{"simple.proto"}, pps::schema_version{1})
         .get());
+
+    // soft delete subject
+    store
+      .upsert(
+        pps::seq_marker{
+          std::nullopt, std::nullopt, ver1, pps::seq_marker_key_type::schema},
+        importing_schema,
+        pps::schema_id{2},
+        ver1,
+        pps::is_deleted::yes)
+      .get();
+
+    // Soft-deleted should not partake in reference calculations
+    BOOST_REQUIRE(
+      store.referenced_by(pps::subject{"simple.proto"}, pps::schema_version{1})
+        .get()
+        .empty());
+    BOOST_REQUIRE(
+      !store.is_referenced(pps::subject{"simple.proto"}, pps::schema_version{1})
+         .get());
 }
 
 SEASTAR_THREAD_TEST_CASE(test_sharded_store_find_unordered) {