ATO benchmarks for cabinet makers

In the ATO's cabinet makers industry, businesses build cabinetry and fit it, whether kitchens, bathroom vanities, wardrobes or shop fittings. Here the ATO's key benchmark range is total expenses to turnover, which it describes as giving the most accurate prediction of a cabinet maker's turnover.

Businesses are sorted by what they report as their principal activity. Before any range is worked out, the ATO sets aside businesses under a minimum or over a maximum turnover, those that report a mix of activities, and those that started trading less than a year before the year in question, and it removes results far out of line with the rest.

The ATO measures turnover as income from goods and services sold, excluding GST. Its total expenses figure counts business costs but sets aside amounts paid to associated persons, a family member for instance. Cost of sales, for its part, excludes salary and wages.

This page shows total expenses, the key range for cabinet makers. The ATO's industry page also lists cost of sales, labour, rent and motor vehicle expenses as other benchmarks, offered as a guide where they apply, and they are not repeated here. Secondary ratios like these are published only when enough of the industry reports the expense.

Every cost of a cabinet job lands in total expenses: the board, laminate and hardware for each kitchen, stone or timber benchtops made by another firm, doors sent out for spray finishing, installers paid as staff or subcontractors, the workshop lease, power for the machines, the delivery truck's running costs and insurance. Of those, the board, hardware and benchtops are the kind of goods a cost of sales figure would hold, while wages stay out of it.

Every range here is a band of cabinet makers spread around the mean expense share for businesses of that size, rounded by the ATO to whole numbers. The band shows where results cluster, not a cap or a floor. The turnover ranges for cabinet makers are drawn from this industry's own results.

The expense share rises clearly as businesses get bigger, and each larger turnover range brings a narrower band. The bands for the low and middle turnover ranges never overlap in either year, while the middle and highest bands share a stretch near the top of the middle band.

In 2023-24 the lowest and highest bands each sit slightly lower at both ends than in 2022-23. The middle band's floor eased while its ceiling stayed level.

Spending above the band means expenses are heavy for the sales made. For a cabinet maker that might be offcuts and miscut panels adding to waste, board and hardware bought at a dearer price than competing workshops pay, quotes priced on a thin margin, a workshop lease or installer team sized for more jobs than came in, or joinery made for the owner's own home counted among the business's materials. Cash for small jobs, such as a single vanity, left out of the sales records pushes the share up too.

Spending below the band may trace to costs that were never entered, such as wages handed in cash to a casual installer or hardware put on a private credit card, or to a stronger margin and tighter use of board. The books can be checked for a recording cause first:

• Each supplier bill for board, hardware and benchtops entered, including late bills for jobs finished in June
• Board, edging and hardware counted on the last day of the financial year
• Every finished job invoiced in full and payments agreed to bank deposits

With a full financial year's profit and loss in hand, total expenses divided by turnover gives the ratio to hold up against the matching turnover range. Figures covering only part of a year, a business's opening year or a business that also runs a separate activity differ from what the ATO measured, and a year with a heavy one-off repair to a major machine reads differently too. A big kitchen or shop fitting job that starts in one financial year and finishes in the next can also make either year look unusual.