Description Small business benchmarks The Tax Office has recently issued some benchmarks for different types of small business. Those benchmarks are prepared on the basis of average business trading results of 2007/2008. The below can be found from the ATO website. Small business benchmarks are designed to help business meet their tax obligations by enabling them to track their performance against the rest of their industry We have benchmarked the key business ratios for high medium and low turnover businesses for more than 100 industries. By comparing your business to the benchmarks for your industry you can assess your business’s performance. We also use benchmarks to identify businesses that may be avoiding their tax obligations by not reporting some or all of their income. By developing benchmarks for small businesses we are making it clear about what we expect from businesses in an industry. This makes it harder for dishonest operators to get away with not reporting cash income – and makes it fairer for everyone else. Businesses reporting outside the benchmarks may attract our attention. There may be good reasons for this disparity, but taxpayers who find they are outside the benchmarks for their industry should determine whether they have correctly recorded and reported their income and deductions. We have developed two types of benchmarks for the small business (micro-market) sector: performance benchmarks, which are based on information small businesses report to us on income tax returns and business activity statements input benchmarks, which are based on information industry participants and trade associations provide to us. Our small business benchmarks are grouped into categories based on the Business industry codes. These codes are used by taxpayers to describe the activity from which their business derived the highest gross income or incurred the smallest loss. Categories include: building and construction trade services education, training, recreation and support services food services health care and personal services manufacturing professional, scientific and technical services retail trade transport, postal and warehousing other services. Terms we use When we say: you, we mean you as a business, for example, a sole trader, a partnership, a trustee of a trust or superannuation fund, or a company business, we mean small businesses in the micro market turnover, we also mean sales, that is the total revenue you receive from providing goods or services each year total business income, we mean total income including interest, rent and dividends benchmark, we mean small business benchmarks, a statistical measure of businesses in a specific industry, either performance or input cost of goods sold, we mean the cost of producing goods for sale each year labour costs, we mean salary and wage payments, including contractor payments and wage payments of sole traders or partnerships (excluding payments to associated parties). Last Modified by the ATO: Monday, 17 May 2010