Benchmarking – how does your business compare?

How to avoid being audited and increase performance

Small business benchmarks are a tool the Australian Tax Office (ATO) use as a guide to help compare small business’s performance against similar businesses in the same industry.

Why use ATO benchmarks?

The ATO benchmark methodology has been verified as statistically valid by an independent organisation and is consistent with international approaches.

ATO benchmarks:

  • are based on the biggest data set available – calculated from tax returns and activity statements from over 1.4 million small businesses
  • account for businesses with different turnover ranges (up to $15 million) across more than 100 industries
  • are published as a range to recognise the variations that occur between businesses due to factors such as location and businesses circumstances.
  • Updated benchmark ratios each year based on:
  • the business industry code, derived from the Australian and New Zealand Standard Industrial Classification (ANZSIC)
  • the main business activity on your tax return
  • the trading name of your business.

How to check your business?

The easiest and quickest way to see how your business compares to competitors is by using the business performance is to click on the ATO website link below and follow the instructions.

You can find your business’s benchmark by business type or industry.

The Business Experts say:

As the ATO continually improve and refine their benchmarking data, they are increasingly using this data to single out tax payers for audit. 

Therefore, it is very important you know where your business stands.  As part of our quality assurance program we do perform benchmark tests when completing year-end tax returns and do inform our clients of any major discrepancies.   This is an after the fact task and may be too late for remedy solutions.  We suggest benchmarking testing be performed on a regular basis as part of an ongoing business management plan.  Please feel free to contact us for more information.


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