ATO releases new small business benchmarks for 100 industries

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Understanding the ATO's New Small Business Benchmarks and How Trinity Accounting Practice Can Help You Thrive

Introduction
The Australian Taxation Office (ATO) has released updated small business benchmarks for more than 100 industries. These benchmarks are designed to help businesses measure financial performance and ensure compliance with tax obligations. Whether you operate in retail, construction, hospitality, or healthcare, understanding these benchmarks is essential for running a sustainable and profitable business.

At Trinity Accounting Practice, we help small business owners interpret benchmark data, identify inefficiencies, and align their operations with ATO expectations. Here’s what you need to know.

What Are Small Business Benchmarks?
Small business benchmarks are financial ratios compiled by the ATO from over two million business tax returns. These benchmarks set standard ranges for common business expenses compared to turnover, helping both business owners and the ATO identify unusual activity.

Typical ratios include:

• Cost of sales to turnover
• Labour to turnover
• Rent to turnover
• Total expenses to turnover
• Motor vehicle expenses to turnover

Benchmarks are sorted by industry and business size, providing specific and meaningful comparisons.

Why the ATO Created Benchmarks
The benchmarks help detect businesses that might be under-reporting income or inflating expenses. They also give business owners an opportunity to self-assess performance.

The ATO estimates that non-compliance in the small business sector contributes to more than $11 billion in lost revenue annually. Benchmarks are one of the tools used to encourage fair and accurate reporting.

Industries Covered by the Benchmarks

Benchmarks exist for a wide range of industries, including:

• Accommodation and food services
• Construction and trades
• Retail businesses
• Transport and logistics
• Beauty and personal care
• Health professionals
• Automotive services
• Technical and professional services

Each category includes benchmark data broken down by annual turnover brackets, making it easier to compare your business fairly.

Key Financial Ratios to Monitor

• Cost of Sales to Turnover – Indicates gross profit efficiency
• Labour to Turnover – Measures staffing expenses
• Rent to Turnover – Helps assess location costs
• Motor Vehicle Expenses to Turnover – Especially relevant for mobile or delivery businesses
• Total Expenses to Turnover – Provides an overall efficiency snapshot

Comparing your figures to industry averages can uncover areas needing attention.

ATO App: Business Performance Check Tool
The ATO offers a Business Performance Check within their app. This tool allows you to:

• Enter your revenue and expense figures
• View how your results compare to others in your industry
• Identify outliers that may trigger an ATO inquiry

Trinity Accounting Practice can guide you through using this tool or analyse your figures directly with tailored insights.

What Happens if You Fall Outside the Benchmark Range?
Being outside the benchmark range doesn’t automatically mean something is wrong, but it may prompt questions from the ATO.

Common reasons for variances include:

• High local operating costs
• Seasonal income patterns
• Differences in business models or suppliers

We work with clients to document legitimate reasons for any discrepancies and prepare supporting evidence in case of review.

Case Study: A Cafe Owner in Beverly Hills NSW
A local cafe owner received an ATO notice after their cost of sales exceeded the benchmark.

Trinity Accounting Practice:

• Conducted a pricing review
• Identified that food supply costs had increased
• Helped adjust menu prices
• Recommended new supplier options
• Set up Xero tracking for cost control

Within six months, the cafe returned to within the ATO’s benchmark and improved profitability by 12%.

How Trinity Accounting Practice Helps Small Businesses

• ✅ Benchmark your financials against ATO expectations
• ✅ Explain and justify any discrepancies to avoid penalties
• ✅ Use software like Xero for ongoing visibility
• ✅ Implement cash flow improvements and cost controls
• ✅ Prepare clear, audit-ready records for ATO compliance

Our goal is to help you focus on business growth while we manage compliance and reporting obligations.

Don’t Leave It Too Late – Benchmark Today
No matter your business stage, regularly reviewing your performance against the ATO’s benchmarks is essential. Doing so can:

• Maximise profits
• Improve financial decision-making
• Avoid audit risks
• Prepare you for growth or financing opportunities

Contact Trinity Accounting Practice
👉 Trinity Accounting Practice
✅ Accounting Firm in Beverly Hills
☎️ 02 9543 6804
📍 159 Stoney Creek Road Beverly Hills NSW 2209
🌐 www.trinitygroup.com.au
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