ATO BENCHMARKS, 2023-24
Gross margin benchmarks for Australian auto electricians
By Ivanka Menken, Strategic Mentor·Last updated ·Figures from the Australian Taxation Office
In the ATO 2023-24 small business benchmarks, Australian auto electricians turning over more than $750,000 report cost of sales of 37% to 46% of turnover, a gross margin before wages of 54% to 63%. Total expenses run 79% to 87%, which leaves 13% to 21% of turnover before the owner, family members and tax are paid.
High turnover range, more than $750,000, turnover excluding GST
54% to 63%
Gross margin before wages
100% less cost of sales of 37% to 46%
79% to 87%
Total expenses to turnover
ATO key benchmark range
13% to 21%
Left after total expenses
Before the owner, family members and tax are paid
What are the 2023-24 benchmarks for auto electricians?
The ATO splits each industry into turnover bands and publishes a range for each. The band closest to a business turning over $500,000 to $3,000,000 is the high turnover range: more than $750,000. The figures in the text on this page come from that band, and the table shows every band the ATO publishes for auto electricians.
A business turning over between $250,001 and $750,000 falls in the medium turnover range instead, and its figures are in the table too.
Cost of sales here excludes wages: the ATO takes salary and wages out of it. So one minus cost of sales is a gross margin before wages, and the gap between cost of sales and total expenses is where wages, rent and every other cost sit.
High band: more than $750,000
Closest to $500K to $3M
- Total expensesATO ratio
- 79% to 87%
- Cost of sales, excluding wagesATO ratio
- 37% to 46%
- Gross margin before wagesCalculated: 100% less cost of sales
- 54% to 63%
- Left after total expensesCalculated: 100% less total expenses
- 13% to 21%
Low band: $50,000 to $250,000
- Total expensesATO ratio
- 58% to 74%
- Cost of sales, excluding wagesATO ratio
- 28% to 42%
- Gross margin before wagesCalculated: 100% less cost of sales
- 58% to 72%
- Left after total expensesCalculated: 100% less total expenses
- 26% to 42%
Medium band: $250,001 to $750,000
- Total expensesATO ratio
- 65% to 80%
- Cost of sales, excluding wagesATO ratio
- 33% to 43%
- Gross margin before wagesCalculated: 100% less cost of sales
- 57% to 67%
- Left after total expensesCalculated: 100% less total expenses
- 20% to 35%
| % of turnover | Low band$50,000 to $250,000 | Medium band$250,001 to $750,000 | High bandMore than $750,000Closest to $500K to $3M |
|---|---|---|---|
| Total expensesATO ratio | 58% to 74% | 65% to 80% | 79% to 87% |
| Cost of sales, excluding wagesATO ratio | 28% to 42% | 33% to 43% | 37% to 46% |
| Gross margin before wagesCalculated: 100% less cost of sales | 58% to 72% | 57% to 67% | 54% to 63% |
| Left after total expensesCalculated: 100% less total expenses | 26% to 42% | 20% to 35% | 13% to 21% |
What do these figures mean for cash and payroll in auto electricians?
At the band’s ratios, a business turning over $1,000,000 would have $130,000 to $210,000 left after total expenses, about $2,500 to $4,040 a week. That pool has to cover your own pay, tax, loan repayments beyond the interest already counted, and any growth you fund yourself.
At the midpoint, auto electricians keep 17% of turnover after total expenses, 2.5 points above the median of 14.5% across the 96 industries on this site. A wider share gives growth more room, but only if the cash arrives before the bills do.
Size changes the picture. Businesses in the low band ($50,000 to $250,000) keep 26% to 42% of turnover; in the band closest to you it is 13% to 21%. Part of the reason is in how the ATO counts: wages paid to staff are an expense, while payments to associated persons are left out. A bigger business carries a bigger payroll, so each extra dollar of turnover arrives with more cost attached.
How much does price change the margin for auto electricians?
At the midpoints, auto electricians keep a gross margin before wages of 58.5%, against a median of 45.8% across the 52 industries on this site where the ATO publishes cost of sales. Between cost of sales and total expenses sit wages, rent and everything else: about 41.5% of turnover at the midpoints.
Ivanka Menken’s chain starts with price: prices too low, margins thin, growth eats cash, payroll becomes a monthly fear. As arithmetic only, if auto electricians in this band charged 5% more for the same work, with the same volume and the same costs, cost of sales would fall to about 35% to 44% of turnover, the gross margin before wages would rise from 54% to 63% to about 56% to 65%, and the share left after total expenses from 13% to 21% to about 17% to 25%.
At the midpoint that is 17% becoming 21% of turnover, about 23% more left over from the same work. Whether your clients would accept the price is a separate question, and the one worth testing.
Where do auto electricians sit among Other Services industries?
We grouped the ATO industries under their ANZSIC divisions so you can compare auto electricians with their neighbours. Of the 7 Other Services industries on this site, auto electricians keep the 7th largest share of turnover after total expenses, using each industry’s band closest to $500,000 to $3,000,000.
The grouping is ours, not the ATO’s; the ratios are the ATO’s. Neighbouring industries face similar costs, so a large gap to a close neighbour is worth a question about price or about the mix of work.
- Panel beating and smash repairs20.5%
- Hairdressers19.5%
- Laundry and dry-cleaning services19%
- Machinery and equipment repairs and maintenance18%
- Beauty services17.5%
- Domestic appliance repair and maintenance17.5%
- Automotive electrical services (this page)17%
How do you check your own numbers against these benchmarks?
Take last financial year’s turnover excluding GST. Divide cost of sales, without wages, by it; then divide total expenses, less payments to associated persons, by it. Compare both with the 37% to 46% and 79% to 87% ranges above.
A benchmark tells you where you sit. It does not tell you why, or which decision to make next. Three free tools on this site turn the comparison into a monthly habit.
CHECK YOUR OWN NUMBERS
If you would like someone to read the numbers with you each fortnight, that is what Ivanka's 1:1 mentoring is for.
What else do founders ask about these figures?
What is a typical gross margin for auto electricians in Australia?
In the ATO 2023-24 benchmarks, auto electricians turning over more than $750,000 report cost of sales of 37% to 46% of turnover, so the gross margin before wages is about 54% to 63%. The ATO excludes salary and wages from cost of sales, so your own figure is only comparable if you take wages out too.
Which ATO turnover band applies to auto electricians turning over $1,000,000?
For auto electricians, the ATO 2023-24 bands are: low turnover range, $50,000 to $250,000; medium turnover range, $250,001 to $750,000; high turnover range, more than $750,000. A business turning over $1,000,000 sits in the high turnover range. Use last year’s turnover excluding GST to find yours.
Are the ATO figures before or after the owner’s pay?
Before most of it. The ATO subtracts payments to associated persons, such as family members, from total expenses, and a sole trader or partner does not pay themselves a wage at all. So the share left after total expenses is broadly what funds the owner, tax, loan repayments and growth. Your accountant can tell you how your own returns are set up.
What does it mean if my business is outside the range?
The ATO says a business outside the key benchmark range may have room to improve, and it uses the key benchmark to spot businesses that may not be reporting all their income. Each range covers the 30% of businesses around the industry average, so many legitimate businesses sit outside it. Check your figures with your accountant first.
Where do these figures come from?
Source: Australian Taxation Office, Small Business Benchmarks, 2023-24 data, published at https://data.gov.au/data/dataset/small-business-benchmarks and licensed under Creative Commons Attribution 2.5 Australia (CC BY 2.5 AU), https://creativecommons.org/licenses/by/2.5/au/. Ratios are reproduced as published; the margins, midpoints, dollar examples, groupings and comparisons are calculated by ivankamenken.com. The ATO does not endorse this page.
ATO industry name: Automotive electrical services. Division grouping (ANZSIC S, Other Services) is ours. How the ATO calculates each ratio: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/small-business-benchmarks/small-business-benchmarks-methodology-and-ratio-calculations/how-we-calculate-benchmark-ratios
This page compares published figures. It is not financial or tax advice; your accountant does the accounts. See every industry →