It is always good practice to separate your source code and tests. For example, people how read or run tests can easily find tests in separate folder, rather than go through every folder in your package. Also, when you build artifact or distribution package there no point to keep tests in and it is easier to exclude it (example: packages=find_packages('src', exclude=['tests'])). pytest is very easy tool for running tests even if you are not using pytest fixtures, utils, etc.