ATO BENCHMARKS, 2023-24

Gross margin benchmarks for Australian pet shops

By Ivanka Menken, Strategic Mentor·Last updated ·Figures from the Australian Taxation Office

In the ATO 2023-24 small business benchmarks, Australian pet shops turning over more than $750,000 report cost of sales of 54% to 64% of turnover, a gross margin before wages of 36% to 46%. Total expenses run 85% to 93%, which leaves 7% to 15% of turnover before the owner, family members and tax are paid.

High turnover range, more than $750,000, turnover excluding GST

36% to 46%

Gross margin before wages

100% less cost of sales of 54% to 64%

85% to 93%

Total expenses to turnover

ATO key benchmark range

7% to 15%

Left after total expenses

Before the owner, family members and tax are paid

What are the 2023-24 benchmarks for pet shops?

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 pet shops.

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
85% to 93%
Cost of sales, excluding wagesATO ratio
54% to 64%
Gross margin before wagesCalculated: 100% less cost of sales
36% to 46%
Left after total expensesCalculated: 100% less total expenses
7% to 15%

Low band: $65,000 to $250,000

Total expensesATO ratio
55% to 79%
Cost of sales, excluding wagesATO ratio
30% to 54%
Gross margin before wagesCalculated: 100% less cost of sales
46% to 70%
Left after total expensesCalculated: 100% less total expenses
21% to 45%

Medium band: $250,001 to $750,000

Total expensesATO ratio
80% to 88%
Cost of sales, excluding wagesATO ratio
39% to 55%
Gross margin before wagesCalculated: 100% less cost of sales
45% to 61%
Left after total expensesCalculated: 100% less total expenses
12% to 20%
Turnover excludes GST. Each range covers the 30% of businesses around the industry average for that band. Source: Australian Taxation Office, Small Business Benchmarks, 2023-24 data, CC BY 2.5 AU; calculated rows by ivankamenken.com.

What do these figures mean for cash and payroll in pet shops?

At the band’s ratios, a business turning over $1,000,000 would have $70,000 to $150,000 left after total expenses, about $1,350 to $2,880 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, pet shops keep 11% of turnover after total expenses, 3.5 points below the median of 14.5% across the 96 industries on this site. A thinner share means growth needs more cash up front for every dollar it brings in.

Size changes the picture. Businesses in the low band ($65,000 to $250,000) keep 21% to 45% of turnover; in the band closest to you it is 7% to 15%. 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 pet shops?

At the midpoints, pet shops keep a gross margin before wages of 41%, 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 30% 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 pet shops 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 51% to 61% of turnover, the gross margin before wages would rise from 36% to 46% to about 39% to 49%, and the share left after total expenses from 7% to 15% to about 11% to 19%.

At the midpoint that is 11% becoming 15.2% of turnover, about 39% 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 pet shops sit among Retail Trade industries?

We grouped the ATO industries under their ANZSIC divisions so you can compare pet shops with their neighbours. Of the 39 Retail Trade industries on this site, pet shops keep the 15th largest share of turnover after total expenses (tied), 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.

Share of turnover left after total expenses, at the midpoint of each industry's band closest to $500K to $3M. Retail Trade industries in this data; the dashed line is the median of all 96 industries (14.5%).
  1. Picture framing retailing23.5%
  2. Entertainment media retailing18.5%
  3. Ice cream retailing15.5%
  4. Confectionery retailing14.5%
  5. Manchester and textile goods retailing14.5%
  6. Computer retailing13.5%
  7. Watch and jewellery retailing13.5%
  8. Clothing retailing13%
  9. Florists13%
  10. Electrical and electronic product retailing12.5%
  11. Footwear retailing12.5%
  12. Garden supplies retailing12%
  13. Gift stores12%
  14. Toy and game retailing11.5%
  15. Floor covering retailing11%
  16. Motor vehicle parts and batteries retailing11%
  17. Pets and pet supply retailing (this page)11%
  18. Sports, camping and fishing retailing11%
  19. Delicatessens10.5%
  20. Discount and variety stores10.5%
  21. Homewares retailing10.5%
  22. Stationery goods retailing10.5%
  23. Fresh meat and poultry retailing10%
  24. Hardware and building supplies retailing10%
  25. Musical instrument retailing10%
  26. Pharmacies10%
  27. Book retailing9.5%
  28. Health food retailing9.5%
  29. Tyre retailing9.5%
  30. Furniture retailing9%
  31. Lawn mower retailing8.5%
  32. Fresh fish and seafood retailing8%
  33. Newsagents8%
  34. Bottle shops and liquor retailing7.5%
  35. Fuel retailing6.5%
  36. New and used car retailing6.5%
  37. Fruit and vegetable retailing6%
  38. Grocery retailing and convenience stores6%
  39. Tobacco retailing4.5%

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 54% to 64% and 85% to 93% 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 pet shops in Australia?

In the ATO 2023-24 benchmarks, pet shops turning over more than $750,000 report cost of sales of 54% to 64% of turnover, so the gross margin before wages is about 36% to 46%. 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 pet shops turning over $1,000,000?

For pet shops, the ATO 2023-24 bands are: low turnover range, $65,000 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: Pets and pet supply retailing. Division grouping (ANZSIC G, Retail Trade) 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 →