ATOs small business benchmarks

ATOs small business benchmarks


The ATO small business benchmark guides are designed to help small businesses compare performance with similar companies in the same industry. These guides have been updated to include data from the 2016-2017 financial year.

Within this system, there are two benchmarks businesses can use. Performance benchmarks apply to all industries and businesses. This area consists of the financial ranges so you can make comparisons and improvements to your business performance. Ranges you can look into are income tax, which is information provided by businesses on their tax returns, and activity statements which are provided using financial year activity statements. Input benchmarks only apply to tradespeople working on projects and purchasing their own materials. Within this benchmark, you can receive an expected range of income based on labour and materials used in a project. This is designed to help estimate turnover and ensure records accurately reflect income.

The small business benchmark system is also designed to aid the ATO in identifying businesses that may be avoiding tax obligations by not reporting elements of their income. The information reported by a business is compared to key elements of the benchmark for their industry, ensuring all activity is in line with the regular work practices.

For some businesses, they may be outside of their industry benchmark meaning turnover is above or below the average range for that particular industry. This can be attributed to new businesses starting, higher or lower selling costs than competitors or possibly incorrect entries on your tax return. If businesses are outside of their expected range it doesn’t necessarily mean they have done something wrong, but in these cases, the ATO recommends reviewing tax and income reports.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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