BENCHMARKS

The ATO considers ‘cash economy’ businesses high risk. These include cafes, hairdressers and cleaners.

Many customers of these businesses pay by cash, and, if this income is not included in the tax return, the ATO misses out on tax and GST. One way that the ATO catches these businesses is by comparing their financial data with other businesses in the same industry. These are called benchmarks, e.g. – % of wages compared to turnover, % of cost of rent to turnover, and % of motor vehicle expenses to turnover.

If you are outside the benchmark range, you are an audit target. Check with your accountant now to see whether your business is within the acceptable range.

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