Small Business Costs by Industry: 10 Australian Benchmarks Compared

What these Australian expense benchmarks measure

We selected ten familiar industries across food, retail, personal services, cleaning and trades. This is a deliberately chosen comparison, rather than a representative sample of Australian businesses or a ranking of all industries.

The current tables use tax returns for the 2023–24 financial year. Their pages were updated on 16 March 2026, and the ATO announced the release later that month. These are historical benchmarks available in 2026, rather than measurements of current supplier prices or wages.

Each ratio divides an expense measure by annual turnover excluding GST. The ATO generally uses sales of goods and services, with fallback rules when the relevant tax-return labels are missing, zero or unusually small relative to total business income. Use the ATO's ratio definitions when matching your accounts to the tables.

We used A$350,000 as an illustrative turnover level because it falls within a published band for every selected industry. The bands themselves remain different. We selected the applicable band; we did not estimate a separate ratio for businesses with exactly A$350,000 of revenue.

Where does A$350,000 of turnover go?

The following table preserves the ATO's total-expense range and published average for the applicable band. The final column multiplies that rounded average by A$350,000.

Source: ATO 2023–24 industry benchmark tables, accessed 20 October 2026; full links are listed below and in the download. All ratios use the ATO's adjusted expense definitions. Dollar amounts are our illustrative conversions, not observed average annual bills. Industry bands have different populations and widths. The cleaning label is shortened here; the download retains the full ATO name.

Among these ten selected rows, the published averages span 25 percentage points. At our assumed turnover, that converts to A$87,500. It does not establish that a plumber earns A$87,500 more than a grocery-shop owner.

The restaurant range alone converts to A$276,500–A$311,500, a spread of A$35,000 at the same illustrative revenue.

Nor should you calculate the average as the midpoint of the range. Plumbing services has a published average of 66% within a 59–74% range. We retained the published figures rather than substituting range midpoints.

Which costs explain the different business models?

The component ratios give you a more useful starting point than the total alone. These figures use the same bands selected for A$350,000 of turnover.

Source: the selected ATO industry tables. “Not published” means that the table supplies no ratio for that expense. It does not mean the business has no such cost. Not every business reports every component, and the ATO applies separate publication tests to the ratios.

Grocery retailing has a much larger cost-of-sales range than hairdressing in these selected bands. Cleaning has a substantial reported labour range while supplying no cost-of-sales benchmark. Those are different operating models; copying another industry's target would give you a poor comparison before you even opened the spreadsheet.

The ATO's cost-of-sales measure excludes salary and wages. Its labour measure adds salary and wages to contractor, subcontractor and commission expenses, then subtracts payments to associated persons. It can also use the activity-statement wage amount when that exceeds the tax-return figure.

Check those definitions before comparing a management-accounting gross margin or payroll total with the ATO figure. Our margin and markup calculator can help with the arithmetic, but you still need to supply a consistently defined cost figure.

Do not add the low endpoints of cost of sales, labour and rent to create a target total. Each range describes its own ratio. The published tables do not establish that one business achieves all those endpoints together, and they do not provide every expense category as a separate component.

A higher turnover band can change the comparison

We repeated the band selection at A$750,000. That changes the applicable band for some industries while leaving others in the same group.

These are comparisons between published band averages, using the same historical tax year. They do not follow the same businesses as they grow. Hairdressers and grocery shops remain in the same respective bands at both illustrative turnover levels.

Plumbing's 66% and 80% averages therefore cannot prove that growing sales causes a 14-point increase in expenses. The groups can contain different mixes of businesses, staffing arrangements and operating circumstances.

For your own forecast, enter the timing of customer receipts and expense payments separately. Our cash runway calculator addresses cash balances; an annual tax-return ratio cannot tell you whether next month's payroll is covered. The cash-buffer study provides worked simulations, with its pound-denominated assumptions clearly separate from these Australian benchmarks.

Why the remainder is not a net-profit benchmark

The ATO calculates the total-expense numerator as total expenses minus payments to associated persons. Its detailed rules also include fallback calculations when the total-expense label is zero, blank or incomplete.

An owner-payment arrangement recorded under an associated-person label can therefore affect the ratio. You need to reconcile owner remuneration and the entity's accounting treatment before interpreting what is left. We have not adjusted all businesses to a common owner salary or calculated a comparable return for their owners.

The total-expense calculation can include items such as depreciation and interest. That is another reason an annual ratio does not describe cash paid out during the year. Subtracting selected cost categories from turnover would leave unlisted expenses as well.

Method, population and downloadable results

We opened all ten current industry pages, read their industry descriptions and extracted both the key and other benchmark tables. We retained all three turnover bands on each page: 30 industry-band combinations and 177 published ratio or average cells. These are counts of table entries, not businesses surveyed.

The selection covers restaurants, coffee shops, bakeries and hot bread shops, beauty services, hairdressers, electrical services, plumbing, building and other industrial cleaning, clothing retailing, and grocery retailing and convenience stores. No industry was selected because of a referral relationship or because it produced the largest gap.

The category boundaries need care. Coffee shops exclude mobile coffee retailers. Beauty services excludes hairdressers, barbers and tanning studios. Electrical services excludes auto electricians and air-conditioning specialists. Grocery retailing excludes businesses mainly selling liquor, fuel or cooked food. The saved results retain the source industry names and links so you can check the relevant description.

The ATO methodology describes a filtered tax-return population. It excludes, among other groups, businesses with turnover below A$30,000 or above A$15 million, businesses reporting multiple activities, and businesses with less than a year in business before the financial year's start. It also removes statistical outliers. These benchmarks do not describe every Australian business.

Industry turnover bands are set separately. The ATO describes its benchmark range as covering 30% of the population around the average and publishes ratios as rounded whole percentages. The ranges should not be treated as the minimum and maximum expense ratios in the industry, or as confidence intervals for our illustrative examples.

The selected tables do not publish business counts by band. We cannot weight the industries into a national average or judge small differences using unpublished sample sizes. The rounded percentages also limit the precision of our dollar conversions.

Our calculations select the band containing A$350,000 or A$750,000, preserve its reported range and average, and multiply each percentage by the assumed turnover divided by 100. A separate HTML parser and integer-dollar calculation check every extracted percentage and conversion. We make no interpolation within a band and impute no missing expense ratios.

Download the 177 published benchmark cells (CSV), including original bands, definitions, dates and source URLs. Download the 20 illustrative turnover comparisons (CSV). The download notes explain the calculations and permitted reuse. ATO source material is attributed to the Commonwealth of Australia; our calculations do not imply ATO endorsement.

How to use a range without inventing a saving

First match your business activity and annual turnover to the correct table. Then reconstruct the expense numerator using the ATO's definitions. Check accounting classifications and missing entries before deciding that a gap means inefficiency.

For an illustration, a restaurant with A$350,000 turnover and A$315,000 of benchmark-defined expenses has a 90% ratio. The applicable published range ends at 89%, equivalent to A$311,500 at that turnover. The A$3,500 difference identifies something to investigate. It does not establish A$3,500 of waste or a saving you can achieve.

The lower endpoint is not a compulsory cost-cutting target. Establish whether the difference comes from your business model, records, income or expense classification before changing prices or suppliers. Keep the invoices and calculations that explain your own result.

Frequently asked questions

Is an expense ratio outside the range proof of a tax problem?

A ratio alone cannot establish the reason for a difference. Check the industry, turnover band, definitions and records, then discuss an unexplained result with your tax professional. This comparison does not assess individual tax returns.

Can I use these percentages to budget a new business in 2026?

They can give you historical context. The selected ATO population excludes businesses with less than a year in business before the financial year's start, and the tables reflect 2023–24 returns. Build a current budget from your own prices, staffing, premises and payment terms rather than assuming a published band will fit a new operation.