ATO benchmarks for carpet cleaners

This ATO industry covers businesses that wash and deodorise carpets, rugs and upholstered furniture using steam or chemical methods, and some also repair, restore or protect carpets. In this trade the key range is the total expenses to turnover ratio, which the ATO judges the most accurate pointer to how much a cleaning business turns over.

Membership rests on the main activity a business reports and the name it trades under. Operators with turnover outside the ATO's limits, those reporting several activities and those trading for under a year when the year opened are dropped, and results far from the rest are removed as outliers.

Turnover is the income from cleaning, repair and protection jobs, excluding GST. If a spouse or other associated person is paid to take bookings, the ATO leaves that payment out of total expenses. The ATO publishes no cost of sales range for carpet cleaners, so total expenses is the only range in the tables here. A ratio appears only once enough of the industry reports the cost behind it, and cost of sales, which would exclude salary and wages in any case, tends to be small for service work like this.

Most of a carpet cleaner's spending therefore sits in the single total. Pre-spray, spotters and protectors are used up on each job. Cleaning done at the customer's premises brings fuel and van running costs with every job, and the ATO lists motor vehicle expenses as a further benchmark for this industry, offered as a guide only. Hoses, wands and machine repairs, lead and booking fees, insurance, and wages or subcontract payments for helpers complete the figure.

A band shows where cleaning businesses near the mean sit within a turnover range, making it a spread rather than a cap or a floor, and its edges carry no decimals. Each industry gets its own turnover ranges, and for carpet cleaners they did not change between the years.

The share rises with turnover, but unevenly: the low and middle bands overlap heavily, and the bigger step comes between the middle and top ranges. In 2023-24 the band narrows at each step up; in 2022-23 the low and middle bands are the same width and the top band slightly narrower. Against 2022-23, the 2023-24 low band starts lower and finishes higher, so it is wider, while the middle and top bands moved down at each end.

From the ATO's list of reasons for an above-band result, several fit a cleaning round. Chemicals bought at higher prices than competitors pay push up input costs. Rates per room set below what other operators charge act as a lower mark-up. A helper paid through quiet weeks is labour out of proportion to the jobs done. Cash handed over at the customer's premises and not entered, or fuel paid from job cash while the job itself goes unrecorded, lifts the share. Cleaning products used around the owner's home but still counted as business purchases are goods used privately.

A below-band result can point to costs never entered, such as fuel or a helper paid in cash, prices with more mark-up built in, or a round run efficiently with less driving between jobs. The recording checks are:

• chemical, parts and machine repair invoices are all entered
• fuel receipts are kept for every fill, cash purchases included
• card and cash payments taken at jobs line up with the deposits in the bank account

Pull a whole financial year's totals out of the profit and loss, take what was paid to associated persons off total expenses, divide by turnover excluding GST, and compare the result with the band covering the business's turnover.

First-year operators and businesses reporting a mix of activities are outside the ATO's figures, so a new round, an incomplete year, or a business that also lists house cleaning or floor covering sales as a second activity is measured against a group unlike it. A major repair to a truck-mounted unit, or any other large one-off cost, makes that year read higher. Helpers paid as subcontractors and helpers paid wages both land in total expenses, so this ratio counts them either way.