Industry Benchmark Ratios for Australian Businesses: How Your Numbers Compare

Benchmark ratios:

Understanding how your business performs compared to industry averages is essential for growth, compliance, and strategic planning. The Australian Taxation Office (ATO) publishes industry benchmark ratios based on tax returns and activity statements, helping businesses assess their financial health.

These benchmarks include:

• Net Profit Ratio = (Total income − Total expenses) ÷ Total income

• Gross Profit Ratio = (Total income − Cost of sales) ÷ Total income

• Wage to Turnover Ratio = Salary and wages ÷ Total income

• Expense to Turnover Ratio = Total expenses ÷ Total income

Let’s explore how these apply across key industries:

Cafés & Restaurants

Typical gross profit ratios range from 60–70%, depending on food costs and pricing. Wage to turnover ratios can reach 40–50%, reflecting high staffing needs. If your wage costs exceed this, it may signal inefficiencies.

Building & Construction

This sector often shows net profit ratios around 10–15% due to high material and subcontractor costs. Monitoring expense to turnover ratios helps identify if overheads are impacting profitability.

IT Professionals

Freelance IT consultants and small firms may see net profit ratios above 30%, especially with low overheads. Benchmarking ensures pricing and project costs align with industry norms.

Professional Services

Legal, accounting, and consulting firms often report net profit ratios of 35–40%. However, wage to turnover ratios vary based on team size and service delivery models.

Why Benchmarking Matters

Benchmarking helps you identify inefficiencies, justify pricing, and make informed decisions about staffing, expenses, and growth. At 7 Bells, we help businesses interpret these benchmarks and apply them to real-world decisions.

Want to know how your business compares? Reach out for a tailored benchmark review.