ATO Benchmarks Can Help You

The ATO has released its latest benchmark data to help businesses in over 100 industries compare their performance against competitors. These valuable benchmarks can help you assess measures like your cost of sales or total expenses, among others, which can greatly assist in gauging business performance and spotting tax compliance risks.

How can I use this data?

Businesses can use the data to help them assess their performance against the standards for their industry. For example, if your expenses seem high compared to your industry's benchmark range, this may prompt you to explore ways you can improve profitability. Additionally, if your figures are outside the benchmark range, you might consider reviewing your records to ensure your business is accurately recording all income and expenses.

Naturally, the ATO also uses this data for compliance purposes. By identifying businesses that are "outliers" compared to their industry benchmarks, the ATO is better able to select businesses for audit. This might include businesses that are reporting significantly less income than competitors relative to expenses or claiming significantly more expenses relative to income.

Being outside a benchmark range does not necessarily mean that something is wrong, but it may lead the ATO to ask questions. ATO Assistant Commissioner Peter Holt likens the benchmarks to the red and yellow flags at the beach: "If you stay between the flags, you'll be less likely to attract our attention."

What benchmarks are available?

The ATO calculates the benchmarks using data from the tax returns and activity statements of over 1.5 million small businesses. The latest updated benchmarks are sourced from the 2016–2017 income year. The types of benchmarks that the ATO publishes for each industry vary, but often include useful benchmark information such as:

  • cost of sales as a percentage of turnover (and average cost of sales);
  • total expenses as a percentage of turnover (and average total expenses);
  • non-capital purchases as a percentage of total sales;
  • labour as a percentage of turnover;
  • rent as a percentage of turnover; and
  • motor vehicle expenses as a percentage of turnover.

Most of these benchmarks are expressed as a range (eg "23% to 33%"), and for each industry the ATO provides different benchmark ranges for different annual turnover ranges.

Data is available for over 100 industries across the following categories:

  • Accommodation and food.
  • Building and construction trade services.
  • Education, training, recreation and support services.
  • Health care and personal services.
  • Manufacturing.
  • Automotive electrical services.
  • Machinery and equipment repair and maintenance.
  • Architectural services.
  • Veterinary services.
  • Retail trade.
  • Transport, postal and warehousing.

How to access the benchmarks

An easy and quick way to access the data is to use the "business performance check" tool on the ATO app. After entering a few details about your business, the app will show you how your business compares to your industry's benchmark ranges. The ATO will not record the information that you enter when using this tool.

Alternatively, you can manually view your industry's data on the ATO website, where it is arranged both alphabetically (A to Z list of industries) and by industry category.

How is your business performing?

Contact us today for expert advice to help your business succeed. We can help you assess how your business measures up against industry benchmarks, review record-keeping for tax compliance and develop effective strategies for improving your business' profitability.

STP - It's Not a Disease!


The government is getting tough on employers who fail to make compulsory superannuation guarantee (SG) contributions. A host of measures are being implemented, ranging from improved reporting systems through to proposed employer penalties of up to 12 months' imprisonment. Here, we examine two particular initiatives that will require some businesses to take action in the next few months.

New reporting standard

On 1 July 2018, Single Touch Payroll (STP) reporting became mandatory for employers with 20 or more employees. Single Touch Payroll (STP) is a change to the way employers report their employees' tax and super information to the ATO. Using payroll or accounting software that offers STP, employers send their employees' tax and super information to the ATO each time they run their payroll and pay their employees. The information is sent to them either directly from the software.

Importantly for small businesses, the government wants to extend STP reporting to all employers from 1 July 2019. It says that mandatory STP reporting for all businesses, regardless of their size, will improve the ATO's ability to monitor compliance and take action when required.

Although the legislation to implement this measure is still before Parliament, we should assume the changes will proceed and plan early. Businesses, if you have not already done so, should ask their current payroll solution provider what software updates (or new products) are required in order to become STP-compliant.

Small businesses without any current payroll software should not panic. The ATO says that over 30 software providers propose to release a low-cost STP solution (costing less than $10 per month) from early 2019, which may include simple solutions such as mobile apps or portals.

 Please get in touch with us if your would like us to work through a solution for you.

Amnesty for underpayments

The government is proposing a 12-month "amnesty" to allow employers to voluntarily disclose and correct any historical underpayments of SG contributions for any period up to 31 March 2018 without incurring penalties or the usual administration fee ($20 per employee per quarter). This is provided the ATO has not already commenced (or given notice of) a compliance audit of that employer. Additionally, employers will be entitled to claim deductions for the catch-up payments they make under the amnesty. (Under the usual rules, such payments are not deductible.) Employers will, however, still need to pay the usual interest charges.

While these are welcome incentives for employers to make a disclosure, there is one problem: legislation to enable the amnesty is still before Parliament, with the amnesty slated to apply from 24 May 2018 to 23 May 2019. There is no guarantee the legislation will pass, so what does this mean for employers wishing to take advantage of the amnesty?

If an employer discloses now and the amnesty legislation is not passed, the ATO will be required to administer the usual laws. This means catch-up payments will be non-deductible and penalties and administration fees will apply. However, the ATO may view the employer's prompt disclosure favourably when deciding whether to use its discretion to reduce the penalties.

On the other hand, taking a "wait and see" approach carries considerable risks. The ATO says "employers who do not disclose their SG shortfalls during the amnesty period may face harsher penalties if they are audited in the future". There is also a risk the ATO could commence an audit while the employer waits, particularly if an employee contacts the ATO about outstanding SG contributions owed to them. This would disqualify the employer from the amnesty (if it became law).

Ensure your business is SG-compliant

Now is an important time for businesses to get their SG affairs in order. Talk to us today to ensure your small business is ready for STP reporting. For any employer with outstanding underpayments of SG contributions, we can assist with what is a lengthy process of making a voluntary disclosure to the ATO.

Disasters & Employee Entitlements



With parts of North Queensland being declared a disaster zone, you should take heed to ensure not only your own safety but the safety of you staff.

During this time, many employers will face the difficulties of managing the continued operation of business under strained circumstances. It is important for employers to remember that employees may have entitlements under their award or agreements that are relevant when an they're unable to attend work due to an emergency or natural disaster.


Here is some information, courtesy of CCIQ, to help you determine the position if employee's cannot attend work. 

What if an employer has to temporarily close its business?
Employers will have to determine employee entitlements if they have to temporarily close as a result of a natural disaster or emergency. This may include offering the choice of taking accrued paid leave or, in some cases, standing down employees.

The Fair Work Act 2009 (FW Act) allows employers to stand down employees when there is no useful work for them do. This can only happen if the reason for the stand down is outside the employer's control, such as a natural disaster. A stand down can be unpaid, but an employer may choose to pay their employees instead. Employees may be entitled to access other types of paid leave under certain circumstances (see "alternatives to standing down employees" below).

Stand down provisions only apply when an employee's award, agreement or employment contract don't contain stand down provisions that deal with the same circumstances. You should check your award, agreement or employment contract to see if it contains any stand down provisions.

If an employer does stand down employees, it's best practice to tell those employees in writing (where possible), including:

· the start date of the stand down

· whether the employees will or will not be paid

· the effect on other employment entitlements.


An employer should also try to update employees about when they believe the stand down will end.

What are the alternatives to standing down employees?

Before an employer stands down employees without pay there are other options that they may wish to consider. These may include:

· Inviting employees to take a period of accrued paid leave (for example, annual leave).

· Requiring employees to take annual leave if their award or agreement allows it, or if the employee is award-free.


If there are multiple worksites and not all sites are affected, consider voluntary work sharing arrangements. For example, employees at non-affected sites may offer to take paid leave while their position is temporarily filled by someone from an affected site.

Where appropriate, consider flexible arrangements such as working from home.

Any arrangements to alter an employee's working patterns would need to be made in accordance with the FW Act and any relevant award or agreement.

Are employees able to take leave to take care of themselves or their family?

Natural disasters often result in employees requiring time off to care for themselves or their family, or due to an emergency affecting their family members. Employers should keep in mind the health and wellbeing of their staff when granting access to leave entitlements.

Personal/carer's leave

Employees (other than casual employees) affected by a natural disaster or emergency may have an entitlement to take paid personal/carer's leave or compassionate leave.

For example, if an employee is injured during a flood or bushfire they may be entitled to personal leave. An employee would also be eligible for carer's leave if their child's school closed due to a natural disaster or emergency.

Employees who have used all of their paid personal/carer's leave entitlement, and casual employees, are entitled to two days unpaid carer's leave per occasion to provide care and support to a family or household member due to illness, injury or in the event of an unexpected emergency.

Information for those who want to assist with disaster-relief activities

Employees may be requested to volunteer to assist the community with disaster relief activities through recognised emergency management bodies like the State Emergency Service. Employers and employees should be aware of what entitlements apply to those employees who wish to volunteer in these activities.

Community service leave

The NES entitles employees who are members of a recognised emergency management body to take unpaid community service leave for certain emergency management activities such as dealing with a natural disaster.

Awards and agreements may also contain specific provisions in relation to community service leave in addition to the NES.

Under the NES, the amount of time that can be taken is not specified, however it must be reasonable taking into account:

· the time that the employee is engaged in the activity,

· reasonable travel time associated with the activity

· reasonable rest time immediately following the activity.


An employee who wants to take a period of community service leave must tell their employer as soon as possible, including the expected period of the absence and provide any required evidence of the reason for the leave. In addition, an employee must also be:

  1. engaging in an activity that involves dealing with an emergency or natural disaster
  2. engaging in the activity on a voluntary basis (whether or not the employee directly or indirectly takes or agrees to take an honorarium, gratuity or similar payment wholly or partly for engaging in the activity)
  3. a member of, or has a member-like association with, a recognised emergency management body
  4. requested to engage in an activity, or it would be reasonable to expect that such a request would have been made if circumstances had permitted.


If you are a member of CCIQ and have any questions regarding employment conditions during natural disasters and emergencies they can be contacted on 1300 135 822.

Labor's Tax Policies

With the possibility of Labor winning government this year, I thought I would review Labor's well-publicised policies of negative gearing restrictions, reduction of the CGT discount, and ending excess dividend imputation. These policies are wide-ranging and may affect a broad group of taxpayers including individuals, retirees and SMSFs.

If you hold any investments (not just property), you may be subject to Labor's negative gearing restrictions for investors. From a specific date after the next election (ie the changes will not apply retrospectively and all investments made before the specific date will be grandfathered), negative gearing will be limited to newly-constructed housing. However, the restrictions would apply on a global basis for every taxpayer.

For example, Ian obtains a loan to buy shares after Labor's negative gearing restrictions come into effect, shortly after he receives an unexpected windfall and uses the money to purchase 2 properties. One of his properties is positively geared and one is negatively geared, while the shares are neutral. As long as the investment income exceeds total interest and deductions related to all his investments (ie 2 properties plus shares), then Ian will be able to deduct the full amount of the interest and deductions. However, if the total interest and deductions exceed the total investment income, the excess cannot be offset against other non-investment income and needs to be carried forward to be offset against future investment income or capital gains.

As you can see from the example, the policy would benefit those with multiple investments, whether it be shares, managed funds or property. As long as some of the investments are positively geared then there is still a benefit to be had. For the new "rentvesting" generation, this change may impact on any potential investments they may want to make in the future and quarantining of excess losses may need to be factored into investment decisions.

Labor is also planning to reduce the CGT discount for assets held longer than 12 months from 50% to 25%. Again, the changes will apply from a yet-to-be-determined date after the next election and all investments made before this date will be fully grandfathered. This means that if you purchase an investment after the specified date and sell it after 12 months and the capital gains on the investment is $5,000, you could end up paying anywhere between $200 to $500 in excess tax depending on your tax bracket.

Perhaps the most well-publicised policy in Labor's election package is the elimination of excess dividend imputation. Simply, this is denying individuals and super funds the right to receive a cash refund from the ATO if their imputation credits from dividends exceed the tax they have to pay. When this proposal was first announced, it drew the ire from multiple fronts including retirees and SMSF associations. A concession was then made to exempt pensioners which means the policy is now targeted at low-income earners, self-funded retirees not on the pension, and SMSFs without a pensioner member.

What to do now?

Now that you have all the information on potential tax changes that could be coming your way, it may be a good time to start thinking about whether you will be affected by any of the changes. If you think you may be affected, we can help you put plans in place that will minimise the impact. Contact us today if you would like some expert advice.   

Superannuation Contributions for Seniors

Work test exemption for low balance retirees
An exemption from the work test will apply to voluntary superannuation contributions in the first income year after retirement from 1 July 2019. This means that an individual who is over 65 years of age would be able to make voluntary contributions for one more year after they stop working.

However, for an individual to utilise the work test exemption, their Total superannuation balance must be less than $300,000. Originally, the work test exemption would not be allowed to start a "bring forward" three-year contribution. However, the 2018/19 MYEFO announcement stated it would be allowed for Year 1.

Other new super legislation can work in collaboration with this measure, creating additional areas to obtain a tax saving.

Source: Exposure Draft; MYEFO 20-18/19 p. 130; Budget paper No. 2, p 30

Summer Sales Slump?

The days may be longer and the weather warmer, but for many small business owners, the arrival of summer equals a downturn in sales as customers set their out-of-office replies and go on holiday.

Here are some tips courtesy of Yellow Pages & Jess Della-Franca, Digital content specialist.

If you're no stranger to the dreaded sales slump, here are some practical steps you can take to get back on track.

1.Change up your messaging.

'Tis the season to head to the beach, eat too much and do some serious relaxing, which gives you a good opportunity to take inspiration from these themes and change up your messaging. For example, you might send an email to your mailing list with the subject line "You're probably on holiday, but…" or create a product or service bundle centred around people's needs during the holiday season. Using humour and relatability will help build a rapport with your audience, and highlighting useful products and services helps you stay relevant even during slow periods.

2. Work toward longer-term goals.

Most small business owners have a list of long-term aims that sit on the back-burner whenever day-to-day business gets in the way. If you've been thinking about making any major long-term investments or improvements in the business, use this opportunity to research these objectives further and turn abstract ideas into concrete plans. Create a written timeline for long-term goals, including the steps to achieving each goal and the budget required to do so. This will give you a solid reference point to work from in tandem with your day-to-day responsibilities.

3. Sow the seeds for the busy season.

You probably have some more time on your hands now that business has slowed, which means it's a great time to start planning your year ahead and get your ducks in a row before sales pick up again. Use this time to plan future marketing campaigns, sales strategies, and operational processes so that when you hit a peak again, you'll be well prepared to handle demand, boost sales and provide the best possible customer experience. You could even spend some time on the , where you'll find a wide range of how-to and informative articles on digital marketing that could inspire your marketing plan for the new year. 

4. Hold a holiday sale.

Everybody loves a sale, and the holiday season offers a good opportunity to incentivise customers with discounts so you can maintain a decent cash flow even if your bottom line isn't as lucrative as other times of the year. If you're a product-based business, holding a holiday sale also allows you to sell off excess stock and cut down on storage costs, which will free you up to sell more when sales pick up.

5. Get social.

During the Christmas holiday period social media usage peaks. This is a great opportunity for you to advertise your business on social, connecting you with more customers and building your social following. And if you haven't explored social advertising before, take some time to experiment with what works, testing different messaging and different post times.

Try to keep your messaging fun and inline with the holiday vibe that floods social feeds during this time. For hints on creating a great social campaign check out our article – .

6. Take a break.

If it seems like the rest of the world is on holiday or kicking back and relaxing over summer, it could be a sign that you should do the same. You've worked hard all year to keep your business ticking along nicely, so if you can manage it, take a well-deserved break and come back refreshed and ready to kick those goals in the new year.

Blitz on Sharing Economy

 ATO Continues Its Blitz On The Sharing Economy

The sharing economy has become a big disrupter in the Australian market, particularly in the areas of accommodation, transport, food delivery, or car sharing. It seems like everyone is getting in on the action of making a little extra money on the side whether it be renting out a spare room, driving for a ride sharing service, or even sharing their cars. It is no surprise then that the ATO is keeping a close eye on the participants in this sector.

In the latest round of salvos against people in the sharing economy that may be flouting tax laws, the ATO is turning its attention to car sharing platforms. This interest has been prompted by the growing popularity of third party services such as Car Next Door, Carhood and DriveMyCar Rentals.

If you receive income from sharing your car, no matter how little, you need to include it in your tax return, and cannot avoid tax by calling it a hobby.

However, the flip-side is that you are entitled to claim deductions directly related to renting, hiring or sharing of your car. These expenses can include: platform membership fees, availability fees, cleaning fees, and car running expenses. The deductions you can claim depends on the car sharing agreement you have. For example, different agreements require either the car borrower or car owner to bear the costs of refuelling the car. Therefore, you can only claim expenses if you actually paid for them. Another thing to keep in mind is keeping accurate records and retaining all your receipts to back up any expense claims should the ATO come knocking.

If you participate in car sharing arrangements you should also be aware that deductions for running expenses may differ depending on the vehicle that's being shared. Cars designed to carry a load of less than one tonne can use the cents-per-kilometre method or the logbook method, but motorbikes and vehicles designed to carry more than one tonne or more than 8 passengers cannot use the cents-per-kilometre method.

Other pitfalls of car sharing include situations where you jointly own a car, in which case, all income and deductions need to be apportioned based on your share of ownership. In addition, if your car sharing activities amount to more than occasionally renting out your own car (ie. you're considered to have an "enterprise" of renting or hiring your car), you may be required to register for GST. In those instances, you will have to pay GST on the payments you receive, but will be able to claim GST credits provided you use them in carrying on your "enterprise".

This focus on car sharing comes on the back of an ongoing data-matching program on online accommodation platforms which will collect data to identify people providing accommodation through online platforms during the 2016-17 to 2019-20 income years. Details collected from this data-matching program include: listing owner and property details (name, residential address, phone number, date of birth, rental property address etc), financial transactions per listing (bank details of owner, gross rental income, nights books etc), property activities (listing date, conversion rate, host/owner block out dates, price per night etc). The program will also obtain various information from financial institutions of the platform providers.

Need more information?

Contact us if you would like more information on the ATO's blitz on car sharing, online accommodation or the sharing economy in general. We have the expertise to help you get it right whether you're renting out your home or car occasionally, or whether you're running an enterprise.

So You Want to be an Independent Contractor



Confused about what it means to be an Independent Contractor?

Maybe you are working for a business but you want to start your own business.

Maybe your employer has suggested that you could work at home, and they will change your status to that of an Independent Contractor.

Before you make this change, you should know about some of the pros and cons of working independently.   


  1. Independence.  You may be able to work your own hours from whatever location you choose depending on the type of job.  You should be able to negotiate pay rates and a payment schedule.  You will have to keep records required by your host business such as timesheets etc.
  2. No Tax Withholding.  Some people consider it a benefit that the payments you receive as an independent contractor don't have income tax withheld.  This can be a curse if you don't put away funds to cover this debt.  It will come home to roost every year.
  3. Deducting Business Expenses.  Expenses you pay to run your independent contractor business are tax deductible.  Check what is and is not an "approved expense", never assume.


  1. No Guarantee of Income.  Being independent also means you don't get a regular paycheck. If you are lucky enough to work for one or more clients who pay you regularly, that's great.  Manage your cash flow and have a slush fund to cover you through lean times.
  2. No Benefits. One of the main reasons people stay employed is to have employer-paid benefits such as healthcare. If you need health insurance, you can get it but you will need to pay for it.
  3. You Still Pay Taxes. As an Independent Contractor, you still have to declare all the income from your work and you still must pay taxes and any other levies required on that income.

TIP:  An Independent Contractor can have a contract.  Get a written contract from each person or business you work for.  Having a contract spells out "what happens when."  Having a contract can settle many disputes before they start, and you can take a contract to court to get paid, if necessary. 

If you need further guidance on the benefits and drawbacks of being an Independent Contractor, consider a consultation with your Accountant.  This is a critical decision which can affect your future wealth creation and your current living standards.

Scams Alert

 Tax Scams Update: Stay Smart Online and Offline

The ATO reported recently that the most common type of scam is where the scammer demands payment for a fake tax debt or sends an email asking for personal information in order to pay out a refund, which may at first glance appear quite attractive! Not only do scammers try to steal money, they also try to steal identities. The Government has identified several cases of misuse of stolen personal information that have led to fraudulent income tax returns, as well as GST, superannuation and welfare frauds.

Scammers are becoming more sophisticated in their attempts to defraud the public and trick people into handing over money, their tax file numbers and other personal information. A recent scam is to telephone people, displaying an official-looking ATO number as a caller ID so the victim feels confident enough to engage with the scammer and will provide personal information – this type of impersonation is known as "spoofing". Sending emails containing links to bogus websites that mirror the official ATO website is also still a popular scamming method.

The typical story is that a fraudster contacts a taxpayer out of the blue claiming that the taxpayer has overpaid taxes and is entitled to a refund. The fraudster often asks the taxpayer to pay an "administration" or "transfer" fee to obtain the refund. They may also ask for the taxpayer's personal details, including financial details such as bank account information so that the "refund" can be transferred. If the taxpayer hands over money, chances are that it is never seen again, and no transfer is forthcoming.

Another tactic is when fraudsters phone to demand that people pay allegedly unpaid taxes. The ATO is aware of one such aggressive scam where taxpayers are threatened with arrest if they do not pay a fake "tax debt" over the phone. Scammers may also demand payment in gift cards, such as iTunes or prepaid Visa cards.

Kath Anderson, Assistant Commissioner recommends for people to look out not just to protect their own personal identity but also to make family and friends available to the risks. Those people who may be particularly vulnerable are those who do not have regular interaction with ATO and so may find it more difficult to determine genuine requests for information from those that intend to cause harm.

"There are a few simple steps taxpayers can take to protect themselves online, including only giving out personal details to people you trust, keeping tabs on your tax affairs so you know what to expect, and to be cautious about personal information that you share, especially on social media."

If you receive an email, a text message (SMS), or an unexpected phone call from "the ATO" claiming that you are entitled to a refund, or that you owe taxes, or that you must confirm, update or disclose confidential details, such as your tax file number, delete the message or hang up the phone. Do not click any links or download any attachments.

From time to time, the ATO itself will send emails, text messages or official social media updates to advise you of new services. However, the ATO's messages will never request personal or financial information by SMS or email, and its representatives will never ask you to pay money into a personal bank account.

If you receive a call, an email or an SMS and are concerned about providing personal information, you can call the ATO on 1800 008 540 (8am to 6pm, Monday to Friday), forward the suspicious email to, or check your myGov account for any message from the ATO. You can also contact our office for more information if you have concerns.

You should practise the same level of vigilance in relation to calls and emails from people who claim to be from other government bodies, such as state revenue authorities.

Document verification service for businesses

The Government has developed an electronic Document Verification Service (DVS) for business use. The DVS can help you protect your business against identity crime and makes it easier for you to meet any regulatory obligations to verify your customers' identities. The DVS allows businesses to verify information on Australian-issued driver licences, passports, visas and Medicare cards "in real time" directly with the issuing agencies. The system is not a database and does not store any personal information. All DVS checks must occur with the informed consent of the person involved. Further information is available on the DVS website at

Improve your Personal Cashflow

Simple Options to Improve your Personal Cashflow


It is very simple: To gain wealth, you must spend less than you earn.

Being fiscally astute is not rocket science.  Let's review simple options to help you turn your spending habits around and achieve a positive personal cash flow.

  • Settle bills by the due date unless there is an incentive to pay early. Your money is better placed to work for you in an interest-bearing account.
  • Pay off high-interest rate debt to free up money. This is your priority task.  Debt is not a given.  Break the cycle and pay off your debts.  Pay as much extra off the debt as you can.  This will ultimately reduce the amount of interest you are paying and save you money.  Short-term pain for long-term gain.
  • Use credit cards as a means of delaying cash payments to manipulate your cash flow to your advantage.
  • Be market savvy. Keep an eye on the interest rates you're paying on your debts and make sure they're competitive. If they're not, speak to your bank.
  • Evaluate your daily spending habits. Keep track of every item of expenditure for a month.  It is probable that you will be shocked.  Consider carpooling to work, making your own lunch and ditching the gym membership in favour of going for a walk with friends and family.  You will be surprised how much you can save!
  • Be Mean. Develop an attitude toward cutting costs, no matter how small. Turn lights out when you leave a room, sleep on purchasing decisions, never impulse buy, etc.

Making changes to your spending can feel hard. Persist. Being cost-conscious will have a far greater and positive impact on your life.

Management Consulting

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Self-Managed Superannuation Funds

At LBA Partners we provide the professional advice you need to manage your own fund and greatly simplify the process for you.



At LBA Partners we offer a full range of taxation services.