What the benchmarks are
Each year the ATO takes the tax returns of small businesses in an industry and publishes the range in which most of them sit for a handful of ratios, each a cost divided by annual turnover. The current figures come from tax returns for the 2023–24 financial year (pages updated 16 March 2026). Ranges are given for three turnover bands, because a $150,000 business and a $900,000 one spend very differently.
- Cost of sales ÷ turnover: stock, ingredients or materials, excluding labour.
- Total expenses ÷ turnover: everything on the return, less payments to associated persons.
- Labour ÷ turnover: mainly salary and wages.
- Rent ÷ turnover and motor vehicle ÷ turnover, for the industries where they apply.
One ratio is the industry’s key benchmark: cost of sales where businesses report it (cafés, restaurants, retail), otherwise total expenses (salons, trades, gyms, cleaning).
Key ranges for 13 industries, 2023–24
| Industry | Key benchmark | Small | Medium | Large |
|---|---|---|---|---|
| Coffee shops | Cost of sales | 34–42% | 35–41% | 33–38% |
| Restaurants | Cost of sales | 32–39% | 32–38% | 31–36% |
| Takeaway food | Cost of sales | 34–42% | 36–43% | 35–41% |
| Clothing retail | Cost of sales | 39–55% | 46–58% | 48–57% |
| Florists | Cost of sales | 40–51% | 43–50% | 45–53% |
| Hairdressers | Total expenses | 40–57% | 58–75% | 75–86% |
| Beauty services | Total expenses | 48–69% | 69–83% | 77–88% |
| Carpentry | Total expenses | 32–50% | 46–66% | 76–87% |
| Bricklaying | Total expenses | 29–46% | 51–68% | 70–84% |
| Plumbing | Total expenses | 50–66% | 59–74% | 75–86% |
| Electrical | Total expenses | 51–68% | 59–75% | 75–86% |
| Health and fitness centres | Total expenses | 40–64% | 69–83% | 72–85% |
| Cleaning (building) | Total expenses | 30–53% | 46–69% | 69–85% |
Turnover bands differ by industry; each industry page lists its own bands and every ratio. Source: ATO small business benchmarks, 2023–24.
How to work out your own ratios
- Take turnover for a full year, excluding GST.
- Add up each cost for the same year: stock or materials, wages, rent, vehicle costs, then everything.
- Divide each by turnover. Find your turnover band and compare.
Your tax return already has these numbers if it is recent. If it is not, or you want the current year, the bank statement is the most reliable source: see finding money leaks in your bank statement.
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 it means to be outside the range
For your profit: a ratio above range is where to look first. Cost of sales above range usually means prices too low or suppliers too dear; labour above range means rostering or productivity; total expenses above range with the other ratios inside means overheads.
For the ATO: the ATO also uses the benchmarks to spot businesses that may be under-reporting income, for example a café whose cost of sales looks too high for its reported sales. If you are outside the range for a genuine reason (a new business, a fit-out year, an unusual product mix), keep a note of it with your records.
A single year outside range is a question, not an answer. Three things change the picture most: whether the owner is paid through the business, stock bought for the next year, and costs coded to the wrong line.