Small Business Benchmark

Compare the Benchmark Ratio

The risk of ATO Auditing

Small Business Benchmark

Checking your business financial ratios against the ATO small business benchmark
Not only to understand your risk of ATO Audit, but also help you understand more about your business

What financial ratios are often used in the small business benchmark to check your business?

The small business benchmark often uses the two financial ratios below to check if  your business is at risk of being audited:

  • The percentage of the Cost of Sale against the Total Turnover 
  • The percentage of the Total Expenses against the Total Turnover 

Please find the Min and Max of the above ratios for the Small Business Benchmark in your industry below: 

Business TypeTurnoverTurnover RangeCost of Sale (Min)Cost of Sale (Max)Total Expenses Per (Min)Total Expenses Per (Max)
Business TypeTurnoverTurnover RangeCost of Sale (Min)Cost of Sale (Max)Total Expenses Per (Min)Total Expenses Per (Max)

What it means to be outside the benchmark range?

When ATO see a business significantly outside the key benchmark range, it doesn’t always mean that the small business owners have done anything wrong.

But it does indicate something is unusual and it is more likely that ATO may contact them for more information.

Reporting above a benchmark range

If your business is reporting above the benchmarks, it means your expenses are high relative to your sales.


This may indicate that your:

  • wastage is higher – research best practice for your industry
  • goods taken for personal use have been counted as business stock
  • competitors may be able to source inputs at lower cost than you – it might be time to see if you can buy stock or materials at a lower rate
  • volume of sales is too low considering your rent or labour costs 
  • mark-up is lower than your competitors 
  • sales are not completely recorded
  • internal cash controls may need to be examined – ensure cash taken for expenses is recorded as sales.
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