Cafe benchmark
This is how the ATO monitors Cafes
Performance benchmarks – The ATO determines performance benchmarks, often updated annually and developed using the information reported on income tax returns and activity statements, the 2014–15 year is the most recent at the time of writing this page.
These benchmarks show a number of different financial ratios of business income to business expenses, to help businesses compare their performance against similar businesses in their industry.
The key benchmark ratio for this industry is cost of sales to turnover. This ratio is likely to be the most accurate predictor of business turnover. For businesses that do not report cost of sales or only report a small amount, total expenses to turnover can be used to predict turnover.
2014–15 financial year
Key benchmark ratio Annual Turnover Range
Income tax return $65k–$250K $250K-$600k More than $600k
Cost of sales/turnover 35% – 42% 35% – 41% 32% – 38%
Average cost of sales 38% 38% 35%
Total expenses/turnover 78% – 88% 84% – 92% 97% – 93%
Average total expenses 83% 88% 90%
Activity statement Non-
capital purchases/total sales 58% – 71% 55% – 66% 51% – 60%
The following benchmarks can be used as a guide for businesses to review their performance and business practices against other similar businesses.
Not all expenses are reported by every business, so one or more of the benchmarks below may not apply to your business.
Benchmark Ratio Annual Turnover Range
Income tax return $65k–$250K $250K-$600k More than $600k
Labour/turnover 18% – 28% 19% – 28% 25% – 32%
Rent/turnover 12% – 19% 10% – 16% 7% – 13%
Motor Vehicle expenses 2% – 3% 1% – 2% 1%
Last updated: 28 Mar 2017
Contact us us to find out how we can help you stay away from the ATO focus, we can also help with your bookkeeping and point you in the right direction with the <Point of Sales Systems>.