The short answer
ATO 2023–24 benchmarks put restaurant cost of sales at 31–39% of turnover, labour at 18–34% and rent at 6–17%. Total expenses average 84% of turnover under $500,000, 88% up to $2 million and 91% above. Takeaway shops run a similar food cost (34–43%) with lower wages (15–27%).
Restaurants: ATO benchmark ranges, 2023–24
| Annual turnover | $65,000 – $500,000 | $500,001 – $2,000,000 | More than $2,000,000 |
|---|---|---|---|
| Cost of sales ÷ turnover (key benchmark) | 32–39% | 32–38% | 31–36% |
| Average | 35% | 35% | 34% |
| Total expenses ÷ turnover | 79–89% | 84–93% | 88–94% |
| Average | 84% | 88% | 91% |
| Labour ÷ turnover | 18–30% | 23–32% | 27–34% |
| Rent ÷ turnover | 11–17% | 8–12% | 6–9% |
| Motor vehicle ÷ turnover | 1–3% | 1% | 0–1% |
Source: ATO small business benchmarks, restaurants, from tax returns for the 2023–24 financial year (page updated 16 March 2026).
Takeaway food services: ATO benchmark ranges, 2023–24
| Annual turnover | $65,000 – $200,000 | $200,001 – $600,000 | More than $600,000 |
|---|---|---|---|
| Cost of sales ÷ turnover (key benchmark) | 34–42% | 36–43% | 35–41% |
| Average | 38% | 39% | 38% |
| Total expenses ÷ turnover | 69–82% | 76–87% | 84–93% |
| Average | 76% | 82% | 89% |
| Labour ÷ turnover | 16–26% | 15–24% | 19–27% |
| Rent ÷ turnover | 10–17% | 10–15% | 7–12% |
| Motor vehicle ÷ turnover | 3–6% | 1–3% | 1% |
Source: ATO small business benchmarks, takeaway food services, from tax returns for the 2023–24 financial year (page updated 16 March 2026).
Reading the ranges
- Food cost is steady across sizes (34–35% on average for restaurants). Above 39% means menu prices, portions or waste.
- Wages rise with size as the owner stops working the floor: 27–34% above $2 million.
- Takeaway wins on wages and loses on margin per order: less service, more volume needed.
Worked example: a 70-seat restaurant, $1,200,000 turnover
| Line | A year | % of turnover | ATO range ($500,001 – $2,000,000) | Where it sits |
|---|---|---|---|---|
| Cost of sales | $456,000 | 38.0% | 32–38% | Inside |
| Total expenses | $1,128,000 | 94.0% | 84–93% | Above |
| Labour | $408,000 | 34.0% | 23–32% | Above |
| Rent | $132,000 | 11.0% | 8–12% | Inside |
Food cost and rent are inside range. Wages two points above it and total expenses one point above leave 6% instead of the typical 12%. On $1.2 million, closing the wage gap alone is worth about $24,000 a year.
Where restaurants usually leak
- A menu nobody has costed since it was written. Cost every dish at today’s supplier prices; the best sellers matter most.
- Quiet nights staffed like busy ones. Roster by covers, not by day.
- Delivery platform commissions on orders priced like dine-in.
- Penalty rates on Sundays and public holidays with no surcharge.
See where your business sits, from your bank statement
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