Concreting services - issued 2012
Concreting services - issued 2012
Businesses in this industry provide concrete services for the construction of buildings and other structures e.g.footpaths, foundations, driveways, single and multi-story buildings.
Performance benchmarks
These performance benchmarks are developed using information reported on income tax returns and activity statements for the 2009-10 year. Performance benchmarks are updated annually.
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To review a comparison of previous years benchmarks, refer to previous year.
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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 an industry.
The key benchmark ratio for this industry is total expenses to turnover. This ratio is likely to be the most accurate predictor of business turnover.
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Businesses operating outside the key benchmark may be contacted by us.
During an audit, if a business does not have records to support their reported income and expenses, we may use benchmarks and other information available to assess the profits of the business.
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Key benchmark ratio
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Annual turnover range
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$50,000 - $200,000
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$200,000 - $500,000
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More than $500,000
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Income tax return
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Total expenses/turnover
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41% - 66%
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71% - 83%
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80% - 89%
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Average total expenses
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54%
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77%
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84%
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Activity statement
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Purchases - non-capital/
total sales
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38% - 60%
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50% - 67%
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54% - 70%
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Benchmarks are published as a range representing the ratios reported by businesses grouped either side of the average. Publishing benchmarks as a range allows for variations across financial years, regions and business models.
The following benchmarks are made available as a guide for businesses to review their performance and business practices against other similar businesses.
The following expenses are not reported by every business, so one or more of these benchmarks may not apply to an individual business.
Benchmark ratio
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Annual turnover range
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Income tax return
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$50,000 - $200,000
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$200,000 - $500,000
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More than $500,000
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Cost of sales/turnover
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19% - 38%
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27% - 45%
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34% - 49%
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Labour/turnover
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11% - 22%
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17% - 30%
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21% - 33%
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Motor vehicle expenses/turnover
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7% - 11%
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4% - 6%
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2% - 4%
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Cost of sales
Cost of anything produced, manufactured, acquired or purchased for either:
- manufacture
- sale or exchange in deriving the gross proceeds
- earnings of the business.
For the purposes of calculating the benchmark, cost of sales excludes labour.
Labour
Salary or wage payments, including contractor payments (amounts exclude GST). Labour does not include payments to associated parties - for example, labour provided by a business owner or business partner.
Total expenses
Total expenses reported on the income tax return less payments to associated parties (amounts exclude GST).
Purchases - non-capital
Purchases reported at label G11 on your activity statement. Non-capital purchases include trading stock and normal running expenses, such as:
- stationery and repairs
- equipment rentals
- leases.
Total sales
Total sales reported on activity statements (amounts include GST). This includes all your:
- GST-free sales
- input taxed sales
- taxable sales.
Turnover
Total revenue received from providing goods or services each year, excluding GST.
You may find the input benchmarks useful in calculating the expected income based on the labour and materials used. They apply to concreters who work directly with household customers and who are responsible for purchasing their own materials.
The input benchmarks have been developed in consultation with the:
- Concrete Placers Association of NSW
- Concreting Industry Association of Queensland
- Master Concreters Association of Victoria.
They represent the industry norm. You should consider your own personal circumstances when using the input benchmarks to assess your situation.
These benchmarks are current as at March 2010.
Input benchmark guide
The table below sets out benchmarks for concreters.
You can use this benchmark to compare and check your business performance to the concreting industry average.
Benchmark guide
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Coverage rate for steel mesh (square metres)
(using 14 square metre sheet)
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12
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Coverage rate for one cubic metre of concrete at 100mm thick (square metres)
Concrete could be ready mix or mixed on site from:
16 x 20kg bags of cement
750kg sand (1/2 cubic metre)
1.2 tonnes aggregate
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10
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Cost of materials as a percentage of price charged to customer
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50 - 60
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Average job size (square metres)
(for example, driveway, plain slab)
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70
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Days to complete average job (including one day for excavation)
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two tradespersons
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3
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three tradespersons
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4
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Price charged ($) per square metre
Plain concrete $50 to $55 with additional charges for coloured, stamped or stencilled
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50 - 70
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Note: All dollar amounts are GST-inclusive.
Input benchmark - sales turnover
You can use this benchmark to:
- estimate your income
- compare your income against the concreting industry average
- check that your records accurately reflect your income.
Income guide
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Two tradesmen
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Three tradesmen
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Number of sheets of steel mesh used per year
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425
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641
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Amount of concrete used per year (cubic metres)
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511
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770
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Square metres completed per year
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5,110
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7,700
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Price ($) per square metre
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50 - 70
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50 - 70
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Sales turnover range ($)
(labour and materials)
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255,500 - 357,700
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385,000 - 539,000
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Average labour charge ($) per day
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200 - 300 each
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200 - 300 each
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Average job size (square metres)
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70
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70
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Jobs completed per year
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73
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110
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Days to complete average job
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3
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2
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Days worked per year
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220
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220
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Notes:
- All dollar amounts are GST-inclusive.
- The amount of ready-mix and mix-on-site concrete used can vary depending on load bearing requirements and location.
Input benchmark examples
Example 1
Kevin and Joe run a concreting business. They work on household jobs only, providing both plain and stencilled concrete.
Going through statements from their suppliers, Kevin estimates that they have purchased 492 cubic metres of concrete during the year. Using the benchmark concrete coverage rate and the average benchmark price per square metre, Kevin estimates a total income of $295,200 for the year.
Kevin and Joe's records only show income of $186,700, which is well below the benchmarks. Kevin can't see any reason why their performance would be so far outside the benchmark so he contacts his tax agent for advice on record keeping.
Example 2
Richard runs a concreting business with one employee doing basic domestic jobs. His records show that he purchased 450 standard sheets of steel mesh in the year.
Using the benchmark coverage rate, Richard should have laid approximately 5,400 square metres of concrete.
Using the benchmark average price per square metre, Richard's sales should be around $324,000.
Richard's records show reported income of $320,000, which is within the benchmarks. He is happy with his record keeping
Example 3
David and Harold are partners in a concreting business. Going through their invoices, they estimate that they have laid 3,500 square metres of concrete during the year.
Using the benchmark average price per square metre, David and Harold estimate their income as $210,000 for the year.
Using the benchmarks on the number of days to complete an average job, David and Harold estimate that they worked a total of 150 days.
They compare their results to the benchmarks. It has been a busy year and David is concerned that their figures are incorrect. He reviews his diary and quote book and finds 60 days of work where he received cash payments and used the quote as an invoice. This is an additional $84,000 in income and 1,400 square metres of concrete laid.
Recalculating their figures, David and Harold have laid 4,900 square metres of concrete and earned income of $294,000 for the year. This is within the benchmarks.
David and Harold review their record keeping practices to make sure they have the right paperwork when preparing future business activity statements and income tax returns.
For more information about small business benchmarks, refer to Small business benchmarks.
For more information about your tax obligations as a small business operator, refer to:
Last Modified: Tuesday, 21 February 2012
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