The ATO has dropped a fresh set of financial benchmarks, giving small business owners a handy tool to check if their numbers stack up against the competition.

Updated every year, these benchmarks cover 100 industries and more than two million small businesses across Australia. From pizza shops to pet stores, tradies to transport services, the data offers insights into average expenses and industry performance, helping business owners spot opportunities or warning signs.

Why should you care?

ATO Assistant Commissioner Tony Goding likens the benchmarks to a routine health check for your business. “Think of our benchmarks like a routine test you take with your GP each year. These can help small businesses diagnose their strengths or spot the early warning signs.”

If your numbers fall outside the expected range, it could be time for a closer look at your business plan.

“Businesses that remain within industry benchmarks are generally less likely to attract the ATO’s attention,” Godding explains.

The shadow economy and why it matters

The ATO is serious about tackling the shadow economy. Businesses dodging tax obligations through underreporting income or overclaiming deductions are in their sights. According to the ATO, shadow economy activities account for nearly 60 per cent of the small business tax gap, costing the country around $11.2 billion each year.

“The benchmarks are just one of the tools we use to tackle the shadow economy, along with community tip-offs and data matching,” says Goding. “It’s all about levelling the playing field for honest businesses who are being undercut by their dishonest competitors that aren’t paying the tax they’re supposed to.”

How benchmarks can help your business

While the benchmarks help the ATO identify outliers, they also help small business owners who can use the data to compare costs. Business owners keen to check their own performance can access the benchmarks on the ATO website or through the ATO app’s business performance check tool. If you’re unsure how to interpret the data, a business adviser or registered tax professional can help you make sense of it all.

So, are your numbers on point or in need of a tune-up? Now’s the time to find out. Check out the ATO small business benchmarks

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