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  • Types of small business benchmarks

    The two types of benchmarks that have been developed for small businesses are:

    Performance benchmarks

    Performance benchmarks are financial ranges for your industry to help you work out how you compare to other businesses in your industry and if you need to make any improvements.

    There are two types of performance benchmark ranges:

    • income tax – from information provided by businesses on their tax returns
    • activity statement – from information provided by businesses using complete financial year activity statement data.

    Tax return benchmark ranges include:

    • cost of sales to turnover (excluding labour)
    • total expenses to turnover
    • rent to turnover
    • labour to turnover
    • motor vehicle expenses to turnover.

    Activity statement benchmark ranges include:

    • non-capital purchases to total sales
    • GST-free sales to total sales.

    The key benchmark range

    You should use the key benchmark range when you compare your business's performance to others in your industry. This is likely to be the most accurate when predicting business turnover.

    The key benchmark range is what we use to protect honest businesses. We may also use it to determine how much tax a business should have paid when there are insufficient or no records available.

    See also:

    Input benchmarks

    Input benchmarks show an expected range of income for tradespeople based on the labour and materials they use to undertake domestic projects.

    They are developed using information provided to us by industry participants and trade associations.

    Input benchmarks may help you to:

    • find your industry's benchmark range
    • estimate your turnover based on labour and materials used
    • ensure your records accurately reflect your income.
    Last modified: 27 Feb 2019QC 47934