Data study · ATO small business benchmarks 2023-24
Break-even ROAS by industry,
from the ATO's own numbers.
Break-even ROAS is 1 ÷ gross margin. On the ATO's 2023-24 benchmarks, cost of sales takes about half of each sale in the median retail and food industry, so it needs a 2.0x return on ad spend just to pay for what it sells. The range runs from 1.39x for picture framers to 8.33x for large tobacco retailers.
Key findings
Six numbers worth quoting.
Each figure is break-even ROAS on cost of sales alone, worked out from the ATO's 2023-24 small business benchmarks. Wages, rent, fees and delivery come on top, so treat every number as a floor.
2.0x
Median break-even ROAS
Across the 156 industry and turnover bands where cost of sales is the ATO's key ratio. At the median, cost of sales takes 50 cents of each sales dollar.
1.39x to 8.33x
The full range
From picture framing retailers turning over more than $260,000 (cost of sales 28%) to tobacco retailers turning over more than $1.5 million (88%).
44 of 53
Bigger means a higher bar
Industries where the largest businesses need a higher ROAS than the smallest, because cost of sales takes a bigger share of turnover in the top band.
1.60x
Food and hospitality
Median for cafes, restaurants, takeaway, bakeries and pubs in their middle turnover band, the lowest of any group. Food, grocery and liquor retail: 2.78x.
6 of 53
Where 3.0x is not enough
Industries where a 3.0x ROAS fails to cover cost of sales in the middle band: bottle shops, fruit and vegetables, fuel, groceries, car dealers and tobacco.
1.44x to 2.08x
Plumbers, before and after labour
Break-even on materials alone, then with the ATO's labour ratio added, for plumbing businesses turning over $150,001 to $600,000 (midpoints of both ranges).
The method in one line
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which the gross profit from ad-driven sales exactly pays for the ads. Below it, the ads cost more than the gross profit they bring in. Above it, they add profit.
The formula is 1 ÷ gross margin. The ATO publishes cost of sales as a share of turnover for each industry, so gross margin is 1 minus that ratio. A business that keeps 40 cents of every dollar after cost of sales needs $2.50 of revenue for every $1 of ads. To run the same sum on your own numbers, use the ROAS and break-even ROAS calculator or work out your margin first with the gross margin calculator.
Worked example: coffee shops
Turnover $250,001 to $600,000, ATO 2023-24
- Cost of sales (ATO average)
- 38%
- Gross margin (1 minus 0.38)
- 62%
- Break-even ROAS (1 ÷ 0.62)
- 1.61x
- ATO range 35% to 41% gives
- 1.54x to 1.69x
The tables
Break-even ROAS by industry and turnover.
Find your industry, then the column for your annual turnover. The large number is break-even ROAS at the ATO's average cost of sales for that band. The line below shows the margin it implies and the break-even across the ATO's range, which covers about 30 percent of businesses around the average. Industry names link to the ATO page each row comes from.
On a phone, swipe each table sideways to see the larger turnover bands.
Retail
Specialty and general retail, where cost of sales is the stock you buy in. This is the closest match to the gross margin most online stores work from.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Book retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.67x60% margin, cost of sales 40%ATO range 1.41x to 2.04xTurnover $65k to $250k | 2.04x49% margin, cost of sales 51%ATO range 1.82x to 2.33xTurnover $250k to $750k | 2.22x45% margin, cost of sales 55%ATO range 2.13x to 2.27xTurnover More than $750k |
| Clothing retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.89x53% margin, cost of sales 47%ATO range 1.64x to 2.22xTurnover $65k to $250k | 2.08x48% margin, cost of sales 52%ATO range 1.85x to 2.38xTurnover $250k to $500k | 2.13x47% margin, cost of sales 53%ATO range 1.92x to 2.33xTurnover More than $500k |
| Computer retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.96x51% margin, cost of sales 49%ATO range 1.67x to 2.33xTurnover $65k to $200k | 2.00x50% margin, cost of sales 50%ATO range 1.75x to 2.27xTurnover $200k to $600k | 2.33x43% margin, cost of sales 57%ATO range 1.96x to 2.86xTurnover More than $600k |
| Craft shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.75x57% margin, cost of sales 43%ATO range 1.54x to 2.04xTurnover $65k to $150k | The ATO uses two bands here | 1.82x55% margin, cost of sales 45%ATO range 1.61x to 2.13xTurnover More than $150k |
| Discount and variety stores(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.89x53% margin, cost of sales 47%ATO range 1.72x to 2.13xTurnover $65k to $250k | 1.96x51% margin, cost of sales 49%ATO range 1.89x to 2.08xTurnover $250k to $600k | 2.04x49% margin, cost of sales 51%ATO range 1.89x to 2.22xTurnover More than $600k |
| Electrical and electronic product retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.13x47% margin, cost of sales 53%ATO range 1.79x to 2.56xTurnover $65k to $750k | 2.50x40% margin, cost of sales 60%ATO range 2.17x to 3.03xTurnover $750k to $2m | 2.94x34% margin, cost of sales 66%ATO range 2.44x to 3.70xTurnover More than $2m |
| Entertainment media retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.69x59% margin, cost of sales 41%ATO range 1.47x to 2.04xTurnover $65k to $350k | The ATO uses two bands here | 1.92x52% margin, cost of sales 48%ATO range 1.64x to 2.27xTurnover More than $350k |
| Floor covering retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.79x56% margin, cost of sales 44%ATO range 1.54x to 2.17xTurnover $65k to $800k | 2.17x46% margin, cost of sales 54%ATO range 1.92x to 2.50xTurnover $800k to $2m | 2.33x43% margin, cost of sales 57%ATO range 2.04x to 2.78xTurnover More than $2m |
| Florists(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.82x55% margin, cost of sales 45%ATO range 1.67x to 2.04xTurnover $65k to $300k | 1.89x53% margin, cost of sales 47%ATO range 1.75x to 2.00xTurnover $300k to $600k | 1.96x51% margin, cost of sales 49%ATO range 1.82x to 2.13xTurnover More than $600k |
| Footwear retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.96x51% margin, cost of sales 49%ATO range 1.67x to 2.44xTurnover $65k to $180k | 2.22x45% margin, cost of sales 55%ATO range 2.04x to 2.44xTurnover $180k to $600k | 2.08x48% margin, cost of sales 52%ATO range 1.92x to 2.27xTurnover More than $600k |
| Furniture retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.92x52% margin, cost of sales 48%ATO range 1.72x to 2.22xTurnover $65k to $500k | 2.08x48% margin, cost of sales 52%ATO range 1.89x to 2.33xTurnover $500k to $1m | 2.22x45% margin, cost of sales 55%ATO range 2.08x to 2.38xTurnover More than $1m |
| Garden supplies retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.72x58% margin, cost of sales 42%ATO range 1.52x to 2.00xTurnover $65k to $250k | 1.85x54% margin, cost of sales 46%ATO range 1.64x to 2.13xTurnover $250k to $750k | 2.04x49% margin, cost of sales 51%ATO range 1.85x to 2.27xTurnover More than $750k |
| Gift stores(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.00x50% margin, cost of sales 50%ATO range 1.79x to 2.27xTurnover $65k to $150k | 2.00x50% margin, cost of sales 50%ATO range 1.85x to 2.22xTurnover $150k to $600k | 2.08x48% margin, cost of sales 52%ATO range 1.92x to 2.27xTurnover More than $600k |
| Hardware and building supplies retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.22x45% margin, cost of sales 55%ATO range 1.89x to 2.70xTurnover $65k to $400k | 2.56x39% margin, cost of sales 61%ATO range 2.27x to 2.94xTurnover $400k to $1m | 2.86x35% margin, cost of sales 65%ATO range 2.56x to 3.23xTurnover More than $1m |
| Homewares retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.92x52% margin, cost of sales 48%ATO range 1.69x to 2.22xTurnover $65k to $250k | 2.08x48% margin, cost of sales 52%ATO range 1.89x to 2.27xTurnover $250k to $900k | 2.22x45% margin, cost of sales 55%ATO range 1.96x to 2.50xTurnover More than $900k |
| Lawn mower retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.22x45% margin, cost of sales 55%ATO range 1.92x to 2.63xTurnover $65k to $550k | 2.63x38% margin, cost of sales 62%ATO range 2.44x to 2.78xTurnover $550k to $1.45m | 3.03x33% margin, cost of sales 67%ATO range 2.78x to 3.23xTurnover More than $1.45m |
| Manchester and other textile goods retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.85x54% margin, cost of sales 46%ATO range 1.61x to 2.13xTurnover $65k to $150k | 1.92x52% margin, cost of sales 48%ATO range 1.72x to 2.17xTurnover $150k to $500k | 2.04x49% margin, cost of sales 51%ATO range 1.85x to 2.27xTurnover More than $500k |
| Musical instruments retail(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.92x52% margin, cost of sales 48%ATO range 1.67x to 2.22xTurnover $65k to $285k | 2.33x43% margin, cost of sales 57%ATO range 2.04x to 2.70xTurnover $285k to $765k | 2.70x37% margin, cost of sales 63%ATO range 2.33x to 3.13xTurnover More than $765k |
| Newsagents(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.00x50% margin, cost of sales 50%ATO range 1.72x to 2.44xTurnover $65k to $500k | 2.22x45% margin, cost of sales 55%ATO range 1.89x to 2.63xTurnover $500k to $1m | 3.13x32% margin, cost of sales 68%ATO range 2.22x to 5.26xTurnover More than $1m |
| Pets and pet supply retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.72x58% margin, cost of sales 42%ATO range 1.43x to 2.17xTurnover $65k to $250k | 1.89x53% margin, cost of sales 47%ATO range 1.64x to 2.22xTurnover $250k to $750k | 2.44x41% margin, cost of sales 59%ATO range 2.17x to 2.78xTurnover More than $750k |
| Pharmacy(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.78x36% margin, cost of sales 64%ATO range 2.56x to 3.03xTurnover $400k to $1.5m | 2.86x35% margin, cost of sales 65%ATO range 2.70x to 3.03xTurnover $1.5m to $3.5m | 3.13x32% margin, cost of sales 68%ATO range 2.94x to 3.33xTurnover More than $3.5m |
| Picture framing retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.43x70% margin, cost of sales 30%ATO range 1.35x to 1.52xTurnover $55k to $140k | 1.41x71% margin, cost of sales 29%ATO range 1.33x to 1.49xTurnover $140k to $260k | 1.39x72% margin, cost of sales 28%ATO range 1.35x to 1.45xTurnover More than $260k |
| Sports, camping and fishing retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.17x46% margin, cost of sales 54%ATO range 1.82x to 2.63xTurnover $65k to $250k | 2.38x42% margin, cost of sales 58%ATO range 2.13x to 2.70xTurnover $250k to $750k | 2.63x38% margin, cost of sales 62%ATO range 2.38x to 2.94xTurnover More than $750k |
| Stationery goods retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.96x51% margin, cost of sales 49%ATO range 1.64x to 2.38xTurnover $65k to $250k | 2.08x48% margin, cost of sales 52%ATO range 1.89x to 2.33xTurnover $250k to $750k | 2.38x42% margin, cost of sales 58%ATO range 2.08x to 2.70xTurnover More than $750k |
| Toy and game retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.22x45% margin, cost of sales 55%ATO range 1.89x to 2.70xTurnover $65k to $150k | 2.38x42% margin, cost of sales 58%ATO range 2.04x to 2.86xTurnover $150k to $550k | 2.50x40% margin, cost of sales 60%ATO range 2.27x to 2.78xTurnover More than $550k |
| Watch and jewellery retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.59x63% margin, cost of sales 37%ATO range 1.43x to 1.79xTurnover $65k to $250k | 1.75x57% margin, cost of sales 43%ATO range 1.59x to 2.00xTurnover $250k to $750k | 2.00x50% margin, cost of sales 50%ATO range 1.79x to 2.27xTurnover More than $750k |
Food and grocery retail
Food, liquor, tobacco and convenience retail. Thin margins on fast-moving stock, so the ROAS needed to cover cost of sales is the highest of any group.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Bottle shops and liquor retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 3.13x32% margin, cost of sales 68%ATO range 2.70x to 3.85xTurnover $65k to $500k | 3.70x27% margin, cost of sales 73%ATO range 3.23x to 4.35xTurnover $500k to $2m | 4.17x24% margin, cost of sales 76%ATO range 3.85x to 4.76xTurnover More than $2m |
| Confectionery retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.92x52% margin, cost of sales 48%ATO range 1.72x to 2.22xTurnover $65k to $250k | The ATO uses two bands here | 1.92x52% margin, cost of sales 48%ATO range 1.75x to 2.13xTurnover More than $250k |
| Delicatessen(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.96x51% margin, cost of sales 49%ATO range 1.67x to 2.33xTurnover $65k to $250k | 2.04x49% margin, cost of sales 51%ATO range 1.85x to 2.27xTurnover $250k to $500k | 2.38x42% margin, cost of sales 58%ATO range 2.08x to 2.70xTurnover More than $500k |
| Fish and seafood retailing (fresh)(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.70x37% margin, cost of sales 63%ATO range 2.38x to 3.23xTurnover $65k to $500k | 2.63x38% margin, cost of sales 62%ATO range 2.33x to 3.03xTurnover $500k to $1m | 3.13x32% margin, cost of sales 68%ATO range 2.70x to 3.70xTurnover More than $1m |
| Fruit and vegetable retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.78x36% margin, cost of sales 64%ATO range 2.38x to 3.45xTurnover $65k to $450k | 3.23x31% margin, cost of sales 69%ATO range 2.86x to 3.70xTurnover $450k to $1.1m | 3.57x28% margin, cost of sales 72%ATO range 3.23x to 4.17xTurnover More than $1.1m |
| Grocery retailing and convenience stores(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.86x35% margin, cost of sales 65%ATO range 2.44x to 3.45xTurnover $65k to $300k | 3.23x31% margin, cost of sales 69%ATO range 2.78x to 3.70xTurnover $300k to $950k | 3.85x26% margin, cost of sales 74%ATO range 3.45x to 4.35xTurnover More than $950k |
| Health food retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.27x44% margin, cost of sales 56%ATO range 1.92x to 2.78xTurnover $65k to $400k | 2.44x41% margin, cost of sales 59%ATO range 2.22x to 2.78xTurnover $400k to $600k | 2.56x39% margin, cost of sales 61%ATO range 2.33x to 2.86xTurnover More than $600k |
| Meat and poultry retailing (fresh)(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.56x39% margin, cost of sales 61%ATO range 2.27x to 2.94xTurnover $65k to $450k | 2.78x36% margin, cost of sales 64%ATO range 2.50x to 3.13xTurnover $450k to $850k | 2.86x35% margin, cost of sales 65%ATO range 2.56x to 3.23xTurnover More than $850k |
| Tobacco retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 3.57x28% margin, cost of sales 72%ATO range 2.94x to 4.55xTurnover $100k to $700k | 5.56x18% margin, cost of sales 82%ATO range 4.55x to 7.14xTurnover $700k to $1.5m | 8.33x12% margin, cost of sales 88%ATO range 7.14x to 10.00xTurnover More than $1.5m |
Food and hospitality
Cafes, restaurants, takeaway, bakeries and pubs. Ingredients are a small share of the menu price, so break-even sits lowest here, before wages and rent.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Bakeries and hot bread shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.52x66% margin, cost of sales 34%ATO range 1.45x to 1.61xTurnover $65k to $400k | 1.56x64% margin, cost of sales 36%ATO range 1.52x to 1.64xTurnover $400k to $750k | 1.49x67% margin, cost of sales 33%ATO range 1.41x to 1.56xTurnover More than $750k |
| Cake shops and patisseries(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.49x67% margin, cost of sales 33%ATO range 1.39x to 1.59xTurnover $65k to $300k | 1.49x67% margin, cost of sales 33%ATO range 1.43x to 1.54xTurnover $300k to $600k | 1.52x66% margin, cost of sales 34%ATO range 1.45x to 1.59xTurnover More than $600k |
| Catering services(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.59x63% margin, cost of sales 37%ATO range 1.45x to 1.75xTurnover $50k to $200k | 1.59x63% margin, cost of sales 37%ATO range 1.47x to 1.69xTurnover $200k to $600k | 1.56x64% margin, cost of sales 36%ATO range 1.45x to 1.69xTurnover More than $600k |
| Chicken shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.72x58% margin, cost of sales 42%ATO range 1.61x to 1.85xTurnover $60k to $250k | 1.82x55% margin, cost of sales 45%ATO range 1.69x to 1.96xTurnover $250k to $575k | 1.79x56% margin, cost of sales 44%ATO range 1.67x to 1.92xTurnover More than $575k |
| Coffee shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.61x62% margin, cost of sales 38%ATO range 1.52x to 1.72xTurnover $65k to $250k | 1.61x62% margin, cost of sales 38%ATO range 1.54x to 1.69xTurnover $250k to $600k | 1.56x64% margin, cost of sales 36%ATO range 1.49x to 1.61xTurnover More than $600k |
| Fish and chips shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.85x54% margin, cost of sales 46%ATO range 1.75x to 1.96xTurnover $65k to $250k | 1.92x52% margin, cost of sales 48%ATO range 1.82x to 2.04xTurnover $250k to $500k | 1.89x53% margin, cost of sales 47%ATO range 1.79x to 2.00xTurnover More than $500k |
| Ice-cream retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.43x70% margin, cost of sales 30%ATO range 1.35x to 1.49xTurnover $65k to $275k | 1.45x69% margin, cost of sales 31%ATO range 1.39x to 1.52xTurnover $275k to $475k | 1.47x68% margin, cost of sales 32%ATO range 1.37x to 1.54xTurnover More than $475k |
| Kebab shops(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.79x56% margin, cost of sales 44%ATO range 1.61x to 1.89xTurnover $50k to $170k | 1.79x56% margin, cost of sales 44%ATO range 1.69x to 1.89xTurnover $170k to $300k | 1.85x54% margin, cost of sales 46%ATO range 1.75x to 1.96xTurnover More than $300k |
| Pizza shops (takeaway)(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.64x61% margin, cost of sales 39%ATO range 1.49x to 1.79xTurnover $65k to $150k | 1.69x59% margin, cost of sales 41%ATO range 1.61x to 1.79xTurnover $150k to $600k | 1.61x62% margin, cost of sales 38%ATO range 1.52x to 1.69xTurnover More than $600k |
| Pubs, taverns and bars(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.67x60% margin, cost of sales 40%ATO range 1.52x to 1.85xTurnover $100k to $750k | 1.59x63% margin, cost of sales 37%ATO range 1.49x to 1.69xTurnover $750k to $2.5m | 1.59x63% margin, cost of sales 37%ATO range 1.45x to 1.72xTurnover More than $2.5m |
| Restaurants(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.54x65% margin, cost of sales 35%ATO range 1.47x to 1.64xTurnover $65k to $500k | 1.54x65% margin, cost of sales 35%ATO range 1.47x to 1.61xTurnover $500k to $2m | 1.52x66% margin, cost of sales 34%ATO range 1.45x to 1.56xTurnover More than $2m |
| Takeaway food services(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.61x62% margin, cost of sales 38%ATO range 1.52x to 1.72xTurnover $65k to $200k | 1.64x61% margin, cost of sales 39%ATO range 1.56x to 1.75xTurnover $200k to $600k | 1.61x62% margin, cost of sales 38%ATO range 1.54x to 1.69xTurnover More than $600k |
Motor vehicles
Car, parts, tyre and fuel retailers, plus two vehicle services. Dealers and fuel retailers sell high-cost stock at low margins.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Automotive electrical services(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.54x65% margin, cost of sales 35%ATO range 1.39x to 1.72xTurnover $50k to $250k | 1.61x62% margin, cost of sales 38%ATO range 1.49x to 1.75xTurnover $250k to $750k | 1.69x59% margin, cost of sales 41%ATO range 1.59x to 1.85xTurnover More than $750k |
| Fuel retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 3.57x28% margin, cost of sales 72%ATO range 2.86x to 4.76xTurnover $75k to $500k | 3.85x26% margin, cost of sales 74%ATO range 3.03x to 5.26xTurnover $500k to $2m | 5.88x17% margin, cost of sales 83%ATO range 4.76x to 8.33xTurnover More than $2m |
| Motor vehicle parts and batteries retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.04x49% margin, cost of sales 51%ATO range 1.72x to 2.56xTurnover $65k to $400k | 2.27x44% margin, cost of sales 56%ATO range 2.00x to 2.63xTurnover $400k to $1.25m | 2.50x40% margin, cost of sales 60%ATO range 2.22x to 2.78xTurnover More than $1.25m |
| Motor vehicle retail (new and used)(ATO benchmark page, opens in a new tab)Key ATO ratio | 3.23x31% margin, cost of sales 69%ATO range 2.50x to 4.55xTurnover $75k to $500k | 4.00x25% margin, cost of sales 75%ATO range 3.03x to 5.56xTurnover $500k to $1.5m | 5.26x19% margin, cost of sales 81%ATO range 4.17x to 6.67xTurnover More than $1.5m |
| Tyre retailing(ATO benchmark page, opens in a new tab)Key ATO ratio | 2.63x38% margin, cost of sales 62%ATO range 2.33x to 3.03xTurnover $65k to $1m | 2.63x38% margin, cost of sales 62%ATO range 2.38x to 2.86xTurnover $1m to $2.5m | 2.78x36% margin, cost of sales 64%ATO range 2.56x to 3.13xTurnover More than $2.5m |
| Panel beating and smash repairs(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.20x to 1.45x69% to 83% margin, cost of sales 17% to 31%Turnover $50k to $150k | 1.23x to 1.54x65% to 81% margin, cost of sales 19% to 35%Turnover $150k to $300k | 1.52x to 1.82x55% to 66% margin, cost of sales 34% to 45%Turnover More than $300k |
Trades and construction
For these trades the ATO's key benchmark is total expenses, and cost of sales is published only as a secondary range, mostly materials. It excludes labour, so read these numbers as a floor.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Air conditioning, refrigeration and heating services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.35x to 1.82x55% to 74% margin, cost of sales 26% to 45%Turnover $50k to $150k | 1.52x to 1.96x51% to 66% margin, cost of sales 34% to 49%Turnover $150k to $600k | 1.69x to 2.13x47% to 59% margin, cost of sales 41% to 53%Turnover More than $600k |
| Alarm installation services (fire and security)(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.25x to 1.67x60% to 80% margin, cost of sales 20% to 40%Turnover $50k to $150k | 1.37x to 1.69x59% to 73% margin, cost of sales 27% to 41%Turnover $150k to $600k | 1.45x to 1.75x57% to 69% margin, cost of sales 31% to 43%Turnover More than $600k |
| Cabinet makers(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.27x to 1.67x60% to 79% margin, cost of sales 21% to 40%Turnover $100k to $300k | 1.52x to 1.82x55% to 66% margin, cost of sales 34% to 45%Turnover $300k to $900k | 1.61x to 1.92x52% to 62% margin, cost of sales 38% to 48%Turnover More than $900k |
| Electrical services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.28x to 1.52x66% to 78% margin, cost of sales 22% to 34%Turnover $50k to $200k | 1.35x to 1.56x64% to 74% margin, cost of sales 26% to 36%Turnover $200k to $500k | 1.43x to 1.69x59% to 70% margin, cost of sales 30% to 41%Turnover More than $500k |
| Fence construction(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.37x to 1.82x55% to 73% margin, cost of sales 27% to 45%Turnover $50k to $250k | 1.49x to 1.89x53% to 67% margin, cost of sales 33% to 47%Turnover $250k to $400k | 1.61x to 1.96x51% to 62% margin, cost of sales 38% to 49%Turnover More than $400k |
| Glazing services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.23x to 1.56x64% to 81% margin, cost of sales 19% to 36%Turnover $50k to $200k | 1.39x to 1.79x56% to 72% margin, cost of sales 28% to 44%Turnover $200k to $600k | 1.56x to 1.89x53% to 64% margin, cost of sales 36% to 47%Turnover More than $600k |
| Landscape construction(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.18x to 1.43x70% to 85% margin, cost of sales 15% to 30%Turnover $50k to $200k | 1.32x to 1.56x64% to 76% margin, cost of sales 24% to 36%Turnover $200k to $500k | 1.37x to 1.61x62% to 73% margin, cost of sales 27% to 38%Turnover More than $500k |
| Painting services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.15x to 1.23x81% to 87% margin, cost of sales 13% to 19%Turnover $50k to $150k | 1.16x to 1.27x79% to 86% margin, cost of sales 14% to 21%Turnover $150k to $600k | 1.16x to 1.27x79% to 86% margin, cost of sales 14% to 21%Turnover More than $600k |
| Plastering and ceiling services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.14x to 1.28x78% to 88% margin, cost of sales 12% to 22%Turnover $50k to $300k | 1.23x to 1.41x71% to 81% margin, cost of sales 19% to 29%Turnover $300k to $1m | 1.32x to 1.49x67% to 76% margin, cost of sales 24% to 33%Turnover More than $1m |
| Plumbing services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.25x to 1.49x67% to 80% margin, cost of sales 20% to 33%Turnover $50k to $150k | 1.35x to 1.54x65% to 74% margin, cost of sales 26% to 35%Turnover $150k to $600k | 1.41x to 1.61x62% to 71% margin, cost of sales 29% to 38%Turnover More than $600k |
| Tiling services (floor and wall)(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.14x to 1.23x81% to 88% margin, cost of sales 12% to 19%Turnover $50k to $150k | 1.16x to 1.27x79% to 86% margin, cost of sales 14% to 21%Turnover $150k to $600k | 1.18x to 1.33x75% to 85% margin, cost of sales 15% to 25%Turnover More than $600k |
| Timber floor sanding(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.20x to 1.35x74% to 83% margin, cost of sales 17% to 26%Turnover $50k to $100k | 1.23x to 1.37x73% to 81% margin, cost of sales 19% to 27%Turnover $100k to $200k | 1.25x to 1.39x72% to 80% margin, cost of sales 20% to 28%Turnover More than $200k |
Repairs and other services
Repair, printing and personal services. Printing uses cost of sales as its key benchmark. For the rest it is a secondary range that excludes labour.
| Industry | Smaller turnover | Middle turnover | Larger turnover |
|---|---|---|---|
| Printing(ATO benchmark page, opens in a new tab)Key ATO ratio | 1.52x66% margin, cost of sales 34%ATO range 1.35x to 1.75xTurnover $65k to $200k | 1.56x64% margin, cost of sales 36%ATO range 1.43x to 1.75xTurnover $200k to $500k | 1.67x60% margin, cost of sales 40%ATO range 1.49x to 1.85xTurnover More than $500k |
| Domestic appliance repair and maintenance(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.25x to 1.54x65% to 80% margin, cost of sales 20% to 35%Turnover $50k to $150k | 1.41x to 1.72x58% to 71% margin, cost of sales 29% to 42%Turnover $150k to $600k | 1.56x to 1.92x52% to 64% margin, cost of sales 36% to 48%Turnover More than $600k |
| Hairdressers(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.14x to 1.22x82% to 88% margin, cost of sales 12% to 18%Turnover $50k to $150k | 1.12x to 1.19x84% to 89% margin, cost of sales 11% to 16%Turnover $150k to $300k | 1.14x to 1.19x84% to 88% margin, cost of sales 12% to 16%Turnover More than $300k |
| Machinery and equipment repairs and maintenance(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.20x to 1.54x65% to 83% margin, cost of sales 17% to 35%Turnover $50k to $200k | 1.23x to 1.64x61% to 81% margin, cost of sales 19% to 39%Turnover $200k to $600k | 1.45x to 1.96x51% to 69% margin, cost of sales 31% to 49%Turnover More than $600k |
| Printing support services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.35x to 1.79x56% to 74% margin, cost of sales 26% to 44%Turnover $65k to $300k | 1.43x to 1.79x56% to 70% margin, cost of sales 30% to 44%Turnover $300k to $900k | 1.54x to 2.04x49% to 65% margin, cost of sales 35% to 51%Turnover More than $900k |
| Veterinary services(ATO benchmark page, opens in a new tab)Secondary ATO ratio | 1.22x to 1.39x72% to 82% margin, cost of sales 18% to 28%Turnover $100k to $300k | 1.25x to 1.37x73% to 80% margin, cost of sales 20% to 27%Turnover $300k to $800k | 1.27x to 1.33x75% to 79% margin, cost of sales 21% to 25%Turnover More than $800k |
Trades
Why do trades need a higher ROAS than the table shows?
Because the ATO's cost of sales leaves out labour, and in a trade business labour is most of the cost of a job. Add the ATO's labour ratio to materials and a plumber's break-even moves from about 1.4x to about 2.1x.
For trades the ATO's key benchmark is total expenses, and cost of sales appears only as a secondary range, which is mostly materials. Labour is a separate ATO ratio: wages and contractor payments, excluding what the owner pays themselves. The table below adds the midpoints of the two ranges. If you pay yourself a wage, your break-even is higher again. For click prices by trade, see our Google Ads costs for tradies data.
| Trade and turnover | ATO ranges | Materials only | Materials and labour |
|---|---|---|---|
| Plumbing services$150,001 to $600,000 | Cost of sales 26% to 35%Labour 16% to 27% | 1.44x | 2.08xspread 1.72x to 2.63x |
| Electrical services$200,001 to $500,000 | Cost of sales 26% to 36%Labour 17% to 30% | 1.45x | 2.20xspread 1.75x to 2.94x |
Industries with no cost of sales benchmark
The ATO publishes no cost of sales ratio for 29 of its 100 industries, mostly services where labour is the main cost. It only publishes a ratio that passes its statistical tests. For these, work from your own accounts.
- Architectural services
- Barber and men's hairdressing
- Beauty services
- Blocklaying services
- Bricklaying services
- Carpentry services
- Carpet laying services
- Cement rendering
- Child care services
- Chiropractic and osteopathic services
- Cleaning services (building and other industrial)
- Cleaning services (carpet, rug and furniture upholstery)
- Concreting services
- Courier services
- Delivery services
- Dental specialists
- Dental surgeons (general)
- Driving schools and instructors
- Furniture removalists
- Health and fitness centres
- Laundry and dry-cleaning services
- Lawn mowing and garden services
- Pest control services
- Physiotherapy services
- Road freight transport services
- Roofing services
- Sports and physical recreation instruction
- Towing services
- Tutoring and coaching
Trade owners can see how we run the numbers for a trade business on marketing for tradies.
Method and limits
How we built this, and what it cannot tell you.
- Source. We read the 2023-24 benchmarks from each of the 100 industry pages in the ATO's benchmarks A to Z on 1 October 2026 (the pages were last updated 16 March 2026). 71 publish a cost of sales range: 53 as the key benchmark, with an average for each turnover band, and 18 as a secondary range without an average.
- Calculation. Gross margin = 1 minus cost of sales to turnover. Break-even ROAS = 1 ÷ gross margin, rounded to two decimals. We converted the average and both ends of every ATO range. Nothing else was adjusted.
- Small businesses only. The ATO builds the benchmarks from the tax returns of businesses that sell directly to consumers, turn over $30,000 to $15 million, report a single activity and had been trading for at least a year before the financial year began, after removing outliers (see the ATO's benchmarking methodology). Bigger businesses, and industries the ATO does not benchmark, can look quite different.
- Cost of sales excludes labour. Per the ATO's ratio definitions, wages are taken out of cost of sales, and what businesses include in it still varies (freight in, packaging, merchant fees). The margins here are margins after cost of sales, before wages.
- A floor, not a target. Break-even on cost of sales ignores wages, rent, fees, delivery, returns and overheads. Your real break-even ROAS is higher. Measure ROAS on revenue your accounts or CRM recorded, not on what the ad platform claims.
- Ranges, not rules. The ATO range covers about 30 percent of businesses around the average, so many sound businesses sit outside it. The data is for the 2023-24 financial year and costs have moved since.
- General information only. This is not financial, tax or accounting advice. Check your own figures with your accountant. The ratios are © Australian Taxation Office for the Commonwealth of Australia and reused under its copyright notice. The ATO does not endorse Profit Geeks or this analysis.
Frequently asked
Questions about break-even ROAS.
- Is a 2.5 ROAS good?
- Only if your margin after cost of sales is above 40 percent, because 1 ÷ 0.40 = 2.5. On the ATO's 2023-24 averages, a 2.5x ROAS covers cost of sales for 40 of the 53 industries in their middle turnover band, breaks even exactly for one, and falls short for 12, mostly low-margin sellers such as grocers, bottle shops, pharmacies, butchers, tyre and fuel retailers and car dealers. Wages, rent and delivery come on top, so the real bar is higher.
- How do I calculate breakeven ROAS?
- Divide 1 by your gross margin written as a decimal. If cost of sales is 47 percent of turnover, gross margin is 53 percent and break-even ROAS is 1 ÷ 0.53 = 1.89x. That is the ATO's average for florists turning over $300,001 to $600,000. Use your own accounts where you can, and count every cost that rises with each sale.
- What does a 4:1 ROAS mean?
- Four dollars of revenue for every dollar of ad spend, the same as 4.0x or 400 percent. On the ATO's average cost of sales it clears break-even in 150 of the 156 industry and turnover bands in our table. It is exactly break-even for car dealers turning over $500,001 to $1.5 million, and short for the largest bottle shops, car dealers and fuel retailers and for tobacco retailers turning over more than $700,000.
- What is the average gross margin by industry in Australia?
- On the ATO's 2023-24 averages, margin after cost of sales runs from 12 percent for tobacco retailers turning over more than $1.5 million to 72 percent for picture framers turning over more than $260,000. Across the 156 bands where cost of sales is the ATO's key ratio, the median is 50 percent. These figures exclude wages. A business that counts staff time as a direct cost, as most trades do, will report a lower gross margin.
- Why is my real break-even ROAS higher than the table?
- Because the ATO's cost of sales leaves out wages, and break-even here leaves out everything else that grows with each sale: card and platform fees, delivery, packaging, returns and the cost of managing the ads. To include them, use 1 ÷ (gross margin minus those costs as a share of revenue). A clothing store on a 48 percent margin that spends, say, 10 percent of revenue on fees, freight and returns breaks even at 1 ÷ 0.38 = 2.63x, not 2.08x.
- Where does the ATO benchmark data come from?
- From the tax returns of small businesses in each industry for the 2023-24 financial year, drawn 12 months after the lodgment due date. The ATO keeps businesses turning over $30,000 to $15 million, removes outliers, splits each industry into turnover bands and publishes a range around the average that covers about 30 percent of businesses. Ratios are rounded to whole numbers.
Cite or use the data
Free to use with a link back.
Our tables and CSV downloads are released under Creative Commons BY 4.0. Quote them, chart them or build on them, and link to this page so readers can see the method. The underlying ratios belong to the ATO, which allows them to be copied and adapted as long as nothing suggests the ATO endorses the result.
How to cite
Profit Geeks (2026). Break-even ROAS by industry, from the ATO small business benchmarks 2023-24. https://www.profitgeeks.com.au/benchmarks/break-even-roas-by-industry
Download
- Break-even ROAS by industry and turnover band (CSV)
210 rows: industry, sector, turnover band, ATO cost of sales range and average, gross margin, break-even ROAS and the ATO source page for each row.
Your own numbers
Know your break-even before you raise the budget.
An industry average is a starting point. On a free 30-minute profit audit we work out the break-even ROAS your own margins set, check whether your tracking reports revenue you actually banked, and tell you plainly if the spend is too small to be worth managing. More data like this sits in our Australian marketing benchmarks.
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