Guide
Posted: 
June 22, 2026

ATO Industry Benchmarks

Have you ever checked how your business compares to the ATO industry benchmarks?

Most small business owners don't even know they exist.

ATO benchmarks are financial ratios and data ranges published by the Australian Taxation Office to help businesses compare their performance against others within the same industry.

The ATO primarily uses these benchmarks to identify businesses that may be:

  • Under-reporting income
  • Over-claiming expenses
  • Not meeting their tax obligations

However, they're also a valuable tool for business owners wanting to better understand their numbers.

There are two main types of benchmarks:

1. Performance Benchmarks

These compare key financial ratios such as:

  • Cost of Sales %
  • Labour %
  • Total Expenses %
  • Rent %
  • Motor Vehicle Expenses %

All measured against your turnover.

2. Input Benchmarks

These estimate expected turnover based on the labour, materials and stock being used within the business.

They're commonly applied to cash-heavy industries such as:

  • Trades
  • Hairdressing
  • Hospitality
  • Beauty services

Many business owners see benchmarks as something to be worried about.

I see them differently.

They're another data point.

If your business sits outside the benchmark range, it doesn't automatically mean you've done anything wrong. Every business is different.

Asking the questions to gain business understandings

What it does mean is that it's worth asking questions:

  • Is your pricing high enough?
  • Are your wages in line with your turnover?
  • Are your overheads too high?
  • Are you carrying too much stock?
  • Are there cashflow leaks hiding in your numbers?

The real value isn't avoiding an ATO review. The real value is using the data to better understand your business.

Because when you understand your numbers, you can make informed decisions with confidence rather than relying on guesswork. Your financial data is trying to tell you a story.

The question is, are you reading it?

Read more about the ATO's Business Benchmarks at https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/small-business-benchmarks