ATO benchmarks for cement renderers

The ATO's cement rendering group covers businesses applying cement render to walls and other surfaces, on homes and on commercial buildings alike. Rendering on houses and on commercial jobs is measured in the same ranges. The ATO selects total expenses to turnover as the industry's key range and considers it the most accurate ratio for predicting a renderer's turnover.

A business is placed in the group through its main reported activity. Left out are businesses beyond the ATO's turnover limits at either end, businesses reporting several activities and those still in their opening year, and outliers are removed before any range is set. The ranges therefore reflect renderers past their first year whose only reported activity is rendering.

Turnover is income from rendering jobs, excluding GST. There is no ATO cost of sales range for cement rendering (that measure would leave out salary and wages), so total expenses is the sole figure here, while the ATO's own page adds labour and motor vehicle ranges as a guide only. The ATO publishes a ratio only when enough of the industry reports that expense, and its methodology observes that service businesses often have little cost of sales.

Total expenses counts the year's business costs minus what is paid to associated persons, for example a family member who helps on jobs. For a renderer, that figure takes in texture coats and acrylic finishes, wages for labourers, invoices from subcontract renderers, hired scaffold, masking film and drop sheets, ute fuel and insurance. Where the builder supplies the render, those materials do not pass through the renderer's books, so labour and gear make up more of the costs. With no cost of sales figure to split materials out, a dearer render order and a longer week for a labourer show up in the same measure.

A range here is a band holding a share of rendering businesses either side of the bracket's mean ratio. It is not a limit in either direction, each end is rounded to a whole number, and the brackets themselves are worked out for this industry only. A band is used because results move with location, region and business model.

The expense share rises with turnover in both years, with the larger jump between the bottom and middle brackets. In 2023-24 the band is slightly wider in the middle range than in the lowest, and narrowest in the top range. That year the bottom and middle bands do not overlap, while the middle and top bands share a little ground. In 2022-23 the band narrowed at each step up.

Set against 2022-23, the lowest band keeps its floor and tops out lower, the middle band starts lower with the same upper end, and the top band starts lower but reaches higher.

Above the band, costs are heavy for the income earned. For a renderer that can mean mixed render wasted or bags left to go hard, materials bought at higher prices than competitors pay, labourers paid through wet weeks with little work, square metre rates set with a thin margin, cash jobs left uninvoiced, or a client's cash spent on supplies without the job income reaching the books.

A result below the band can point to costs missing from the books, such as labourers paid cash and not written up, square metre rates with a fuller margin, or a leaner crew with less waste. Before reading anything into the result, these checks clear the records:

• bills from render suppliers, hire firms and subcontractors for the full year are all entered
• every job invoice agrees with a deposit in the bank
• render bags and other materials left over get counted at year end

Work from a complete financial year's profit and loss: total expenses, with associated persons' payments taken out, divided by turnover, then compared with the band covering the business's turnover bracket. The ATO's ranges rest on full-year results with newcomers, multi-activity businesses and outliers removed, so an incomplete year, a business's first year, a year with an unusually large expense or a business doing other work beside rendering will read differently.

The step between the lowest and middle brackets is the biggest on this page, so a renderer whose turnover moves from the lowest bracket into the middle one compares against a markedly different band. Scaffold hire for a long commercial job can also lift costs in the year it falls in.