What counts as an overhead
Overheads are the costs that do not change with each sale: rent, insurance, software, accounting, phones, vehicles, marketing retainers, bank fees. They are what you pay before you sell anything. Stock, materials and (for most businesses) wages are counted separately.
The ATO’s total expenses ratio captures them together with everything else. If your cost of sales and labour are inside your industry’s range but total expenses are above it, the excess is in overheads.
Rent: the one that matters most
Rent is usually the largest overhead and the hardest to change. The ATO publishes a rent ratio for shopfront industries, and it narrows sharply as turnover grows. For coffee shops it is 10–17% of turnover in the smallest band and 6–10% above $600,000. For gyms it stays between 13% and 23% across all bands. A rent ratio above range is usually a sales problem: the premises need more trade than they are getting.
A one-afternoon review
- From twelve months of bank statements, list every regular payment that is not stock, materials, wages or loans.
- Group by type: premises, software, insurance, vehicles, professional fees, marketing, fees and charges.
- For each line, write who uses it and what would happen if it stopped tomorrow.
- Get one competing quote for the three largest: insurance, phones and internet, and merchant fees are the easiest.
- Cancel anything nobody can name a use for.
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.
Any bank, any currency. The file is read once and not kept. Full report from $149.
What to expect
An overhead review commonly finds savings of a few percent of total overheads, often less than owners hope. It is worth doing because it is quick and certain, but if your total expenses are well above your industry range, the gap is usually in margin or wages, not in subscriptions. Check those first with the wage ratios and pricing guide.