ATO BENCHMARKS, 2023-24
Gross margin benchmarks for Australian takeaway food businesses
By Ivanka Menken, Strategic Mentor·Last updated ·Figures from the Australian Taxation Office
In the ATO 2023-24 small business benchmarks, Australian takeaway food businesses turning over more than $600,000 report cost of sales of 35% to 41% of turnover, a gross margin before wages of 59% to 65%. Total expenses run 84% to 93%, which leaves 7% to 16% of turnover before the owner, family members and tax are paid.
High turnover range, more than $600,000, turnover excluding GST
59% to 65%
Gross margin before wages
100% less cost of sales of 35% to 41%
84% to 93%
Total expenses to turnover
ATO key benchmark range
7% to 16%
Left after total expenses
Before the owner, family members and tax are paid
What are the 2023-24 benchmarks for takeaway food businesses?
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 $600,000. The figures in the text on this page come from that band, and the table shows every band the ATO publishes for takeaway food businesses.
A business turning over between $200,001 and $600,000 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 $600,000
Closest to $500K to $3M
- Total expensesATO ratio
- 84% to 93%
- Cost of sales, excluding wagesATO ratio
- 35% to 41%
- Gross margin before wagesCalculated: 100% less cost of sales
- 59% to 65%
- Left after total expensesCalculated: 100% less total expenses
- 7% to 16%
Low band: $65,000 to $200,000
- Total expensesATO ratio
- 69% to 82%
- Cost of sales, excluding wagesATO ratio
- 34% to 42%
- Gross margin before wagesCalculated: 100% less cost of sales
- 58% to 66%
- Left after total expensesCalculated: 100% less total expenses
- 18% to 31%
Medium band: $200,001 to $600,000
- Total expensesATO ratio
- 76% to 87%
- Cost of sales, excluding wagesATO ratio
- 36% to 43%
- Gross margin before wagesCalculated: 100% less cost of sales
- 57% to 64%
- Left after total expensesCalculated: 100% less total expenses
- 13% to 24%
| % of turnover | Low band$65,000 to $200,000 | Medium band$200,001 to $600,000 | High bandMore than $600,000Closest to $500K to $3M |
|---|---|---|---|
| Total expensesATO ratio | 69% to 82% | 76% to 87% | 84% to 93% |
| Cost of sales, excluding wagesATO ratio | 34% to 42% | 36% to 43% | 35% to 41% |
| Gross margin before wagesCalculated: 100% less cost of sales | 58% to 66% | 57% to 64% | 59% to 65% |
| Left after total expensesCalculated: 100% less total expenses | 18% to 31% | 13% to 24% | 7% to 16% |
What do these figures mean for cash and payroll in takeaway food businesses?
At the band’s ratios, a business turning over $1,000,000 would have $70,000 to $160,000 left after total expenses, about $1,350 to $3,080 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, takeaway food businesses keep 11.5% of turnover after total expenses, 3 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 $200,000) keep 18% to 31% of turnover; in the band closest to you it is 7% to 16%. 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 takeaway food businesses?
At the midpoints, takeaway food businesses keep a gross margin before wages of 62%, 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 50.5% 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 takeaway food businesses 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 33% to 39% of turnover, the gross margin before wages would rise from 59% to 65% to about 61% to 67%, and the share left after total expenses from 7% to 16% to about 11% to 20%.
At the midpoint that is 11.5% becoming 15.7% of turnover, about 37% 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 takeaway food businesses sit among Accommodation and Food Services industries?
We grouped the ATO industries under their ANZSIC divisions so you can compare takeaway food businesses with their neighbours. Of the 9 Accommodation and Food Services industries on this site, takeaway food businesses keep the 4th 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 shops14.5%
- Catering services14%
- Kebab shops12.5%
- Restaurants11.5%
- Takeaway food services (this page)11.5%
- Chicken shops11%
- Coffee shops10.5%
- Pubs, taverns and bars10.5%
- Takeaway pizza shops9.5%
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 35% to 41% and 84% 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 takeaway food businesses in Australia?
In the ATO 2023-24 benchmarks, takeaway food businesses turning over more than $600,000 report cost of sales of 35% to 41% of turnover, so the gross margin before wages is about 59% to 65%. 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 takeaway food businesses turning over $1,000,000?
For takeaway food businesses, the ATO 2023-24 bands are: low turnover range, $65,000 to $200,000; medium turnover range, $200,001 to $600,000; high turnover range, more than $600,000. 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: Takeaway food services. Division grouping (ANZSIC H, Accommodation and Food 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 →