The short answer
ATO 2023–24 total expenses for hairdressers average 48% of turnover under $150,000, 67% up to $300,000 and 80% above. Beauty services average 58%, 76% and 82%. Labour runs 23–44%, rent 8–21%, and hairdressers’ product costs 11–18%. For sole traders and partnerships the owner’s own pay is not an expense on the tax return, which is why the smallest turnover band shows so much left over: much of it is the owner’s wage.
Hairdressers: ATO benchmark ranges, 2023–24
| Annual turnover | $50,000 – $150,000 | $150,001 – $300,000 | More than $300,000 |
|---|---|---|---|
| Cost of sales ÷ turnover | 12–18% | 11–16% | 12–16% |
| Total expenses ÷ turnover (key benchmark) | 40–57% | 58–75% | 75–86% |
| Average | 48% | 67% | 80% |
| Labour ÷ turnover | 23–36% | 25–37% | 32–44% |
| Rent ÷ turnover | 14–21% | 11–17% | 8–13% |
| Motor vehicle ÷ turnover | 3–5% | 2–3% | 1–2% |
Source: ATO small business benchmarks, hairdressers, from tax returns for the 2023–24 financial year (page updated 16 March 2026).
Beauty services: ATO benchmark ranges, 2023–24
| Annual turnover | $65,000 – $200,000 | $200,001 – $400,000 | More than $400,000 |
|---|---|---|---|
| Total expenses ÷ turnover (key benchmark) | 48–69% | 69–83% | 77–88% |
| Average | 58% | 76% | 82% |
| Labour ÷ turnover | 23–35% | 25–37% | 27–39% |
| Rent ÷ turnover | 13–21% | 12–19% | 9–16% |
| Motor vehicle ÷ turnover | 3–5% | 2% | 1–2% |
Source: ATO small business benchmarks, beauty services, from tax returns for the 2023–24 financial year (page updated 16 March 2026).
Reading the ranges
- The jump between bands is wages. A one-chair salon is mostly the owner’s own labour; a salon over $300,000 pays a team (32–44% for hairdressers).
- Rent matters most when small: 14–21% for the smallest hairdressers, 8–13% for the largest.
- Product cost is small (11–18%) but retail sales on top of services are pure margin when they move.
Worked example: a four-chair hair salon, $260,000 turnover
| Line | A year | % of turnover | ATO range ($150,001 – $300,000) | Where it sits |
|---|---|---|---|---|
| Cost of sales | $36,400 | 14.0% | 11–16% | Inside |
| Total expenses | $202,800 | 78.0% | 58–75% | Above |
| Labour | $109,200 | 42.0% | 25–37% | Above |
| Rent | $36,400 | 14.0% | 11–17% | Inside |
Product and rent are inside range. Wages five points above range push total expenses three points above it. The usual cause is paid time between appointments: chair utilisation, not pay rates.
Where salons usually leak
- Empty chair hours paid at full rate. Track booked hours against paid hours per stylist.
- Prices set by the cheapest salon nearby rather than by your own costs.
- No-shows without a deposit or cancellation fee.
- Retail stock bought and not sold, sitting on shelves as cash.
See where your business sits, from your bank statement
Upload a CSV or PDF of your business bank account (3 to 12 months). The health check rebuilds what you really earn, compares each cost with businesses like yours, and shows where money is leaking and who owes you. Free to run: you see how much is at stake before you pay anything.
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