# Gross margin benchmarks for Australian pubs and bars

Source: https://ivankamenken.com/benchmarks/pubs-taverns-bars · By Ivanka Menken, Strategic Mentor · Last updated 21 October 2026

In the ATO 2023-24 small business benchmarks, Australian pubs and bars turning over between $750,001 and $2,500,000 report cost of sales of 33% to 41% of turnover, a gross margin before wages of 59% to 67%. Total expenses run 86% to 93%, which leaves 7% to 14% of turnover before the owner, family members and tax are paid.

## What are the 2023-24 benchmarks for pubs and bars?

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 medium turnover range: $750,001 to $2,500,000. The figures in the text on this page come from that band, and the table shows every band the ATO publishes for pubs and bars.

A business turning over between $100,000 and $750,000 falls in the low 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.

| Ratio, % of turnover | Low turnover range ($100,000 to $750,000) | Medium turnover range ($750,001 to $2,500,000) (closest to $500K to $3M) | High turnover range (More than $2,500,000) |
|---|---|---|---|
| Total expenses (ATO) | 78% to 90% | 86% to 93% | 87% to 94% |
| Cost of sales, excluding wages (ATO) | 34% to 46% | 33% to 41% | 31% to 42% |
| Gross margin before wages (calculated) | 54% to 66% | 59% to 67% | 58% to 69% |
| Left after total expenses (calculated) | 10% to 22% | 7% to 14% | 6% to 13% |

## What do these figures mean for cash and payroll in pubs and bars?

At the band’s ratios, a business turning over $1,000,000 would have $70,000 to $140,000 left after total expenses, about $1,350 to $2,690 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, pubs and bars keep 10.5% of turnover after total expenses, 4 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 ($100,000 to $750,000) keep 10% to 22% of turnover; in the band closest to you it is 7% to 14%. 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 pubs and bars?

At the midpoints, pubs and bars keep a gross margin before wages of 63%, 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 52.5% 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 pubs and bars 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 31% to 39% of turnover, the gross margin before wages would rise from 59% to 67% to about 61% to 69%, and the share left after total expenses from 7% to 14% to about 11% to 18%.

At the midpoint that is 10.5% becoming 14.8% of turnover, about 41% 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 pubs and bars sit among Accommodation and Food Services industries?

We grouped the ATO industries under their ANZSIC divisions so you can compare pubs and bars with their neighbours. Of the 9 Accommodation and Food Services industries on this site, pubs and bars keep the 7th 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.

- Fish and chips shops: 14.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/fish-and-chips-shops
- Catering services: 14% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/catering-services
- Kebab shops: 12.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/kebab-shops
- Restaurants: 11.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/restaurants
- Takeaway food services: 11.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/takeaway-food-services
- Chicken shops: 11% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/chicken-shops
- Coffee shops: 10.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/coffee-shops
- Pubs, taverns and bars (this page): 10.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/pubs-taverns-bars
- Takeaway pizza shops: 9.5% of turnover left after total expenses (midpoint). https://ivankamenken.com/benchmarks/pizza-shops

## 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 33% to 41% and 86% 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.

- The free five-number scorecard: https://ivankamenken.com/scorecard
- The margin-first scaling test: https://ivankamenken.com/margin-first-scaling-test
- The 13-week cash view: https://ivankamenken.com/13-week-cash-flow-for-founders

If you want someone to read the numbers with you each fortnight, that is what Ivanka’s 1:1 mentoring is for: https://ivankamenken.com/mentoring

## Frequently asked questions

### What is a typical gross margin for pubs and bars in Australia?

In the ATO 2023-24 benchmarks, pubs and bars turning over between $750,001 and $2,500,000 report cost of sales of 33% to 41% of turnover, so the gross margin before wages is about 59% to 67%. 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 pubs and bars turning over $1,000,000?

For pubs and bars, the ATO 2023-24 bands are: low turnover range, $100,000 to $750,000; medium turnover range, $750,001 to $2,500,000; high turnover range, more than $2,500,000. A business turning over $1,000,000 sits in the medium 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.

## Source and licence

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.

All benchmarks: https://ivankamenken.com/benchmarks