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Wages % Calculator
Work out what share of your revenue goes to wages, then read it against the figures the ATO and Stats NZ actually publish for a business your size in your industry — each shown with who published it, for what period, and what they counted.
Your inputs
Statutory floors only. The rate you actually pay is usually higher and depends on classification — check the source above.
What this number is
Wages percentage is your total wage cost divided by revenue for the same period. The arithmetic is trivial; what belongs on the top half is not. The honest version includes super or KiwiSaver, leave as it is earned, payroll tax where it applies, and workers' compensation or ACC levies. Leave those out and the number flatters you by several points.
On its own it means little. A trade carrying materials sits lower than a salon, where labour is nearly the whole product. That is why this page asks for your industry and turnover band first — a national average hides both.
What Australia and New Zealand each measure
The two sets of figures below are not the same measurement.
Australia's come from the ATO's small business benchmarks: the ratio is 'labour' divided by 'annual turnover', where labour includes contractors and commissions, then subtracts payments to associated persons. What is published is 30% of the population around the average.
New Zealand's come from the Stats NZ business performance benchmarker, built from Inland Revenue tax data: salaries and wages over turnover, which excludes contractors, published as the 25th percentile / median / 75th percentile (interquartile range).
"Labour" (AU) and "salaries and wages" (NZ) are not the same numerator. The ATO adds contractor, subcontractor and commission expenses into labour. Stats NZ's stated numerator is salaries and wages, and its AES form explicitly says don't include payments to contractors. For trades, where subcontracting is routine, this difference alone can move the ratio by a wide margin. An AU trade figure is therefore structurally higher than an NZ one for the same business.
Why the published figure moves with size
Wages ratios rise as a business grows, for a reason that has nothing to do with running it worse. A small operation is mostly the owner, whose labour never appears in the wage bill. As it grows, the owner stops doing the work and pays others to do it: the cost moves from invisible to visible.
In the ATO's own figures for Hairdressers, the smallest turnover band ($50,000 – $150,000) runs 23% to 36%, while the largest (More than $300,000) runs 32% to 44%. Same trade, same year, different size — a spread no national figure can hold. Read yours against your own band.
The owner's labour is not in these figures
ATO labour-cost benchmarks exclude the owner's own labour.
The ATO builds its labour figure as Total salary and wages expenses + Contractor subcontractor and commissions expenses − Payments to associated persons. That last subtraction takes the owner and their associates back out.
So the published band describes what a business pays other people — not what it costs to staff the business.
An owner-operator who compares their own wages line to that band is comparing unlike things. They will look "efficient" for a reason that has nothing to do with efficiency: their own labour is free in the data and unpaid in life.
The honest comparison adds the owner back at a market rate for the hours they actually work, then compares. A salon owner cutting hair 40 hours a week at 22% wages is not beating a salon at 34% — they are likely paying themselves nothing.
Said plainly: if you work in your own business and do not pay yourself, your figure is not comparable to anything on this page until you add yourself back in at what it would cost to replace you.
New Zealand's owner-labour treatment is UNCONFIRMED. The AES questionnaire splits the line into "Paid to working proprietors and partners" + "Paid employees", which points to proprietors being included — but the benchmark ratios are sourced from Inland Revenue tax data, not that form, and the inclusion could not be confirmed. The zeros across the bottom size bands are consistent with owner-operators simply having no payroll, but that is an inference from the data, not a published statement.
Where a New Zealand zero comes from
Several of the New Zealand rows below read 0%. That is not cheap labour. It is no payroll at all — the only worker is the owner, and the owner's labour is unpaid in the data.
The median is zero in Hairdressing and beauty services (Micro and Small), Takeaway food services (Micro), Electrical services (Micro and Small), Plumbing services (Micro and Small) and Automotive electrical services (Micro and Small) — at least half of the businesses in each of those bands employ nobody.
All three percentiles read zero in Hairdressing and beauty services (Micro), Electrical services (Micro), Plumbing services (Micro) and Automotive electrical services (Micro). Not every band that size reads that way: in Cafes and restaurants (Micro) and Takeaway food services (Micro), at least one percentile is above zero. The table below prints each row as published.
A zero is real, and shown here as published. It is not something to measure yourself against — printing it as a benchmark without this paragraph beside it would do you harm.
What to do when the number is wrong
It is a signal, not a target. The ATO's own framing is diagnostic, not aspirational: falling outside the range means "your business may have room to improve" and, separately, that you are more likely to attract ATO attention. It is not a number to aim at.
Work in this order. First check the number is real: put the on-costs in, and put yourself back in at a market rate for the hours you work. Plenty of alarming percentages are arithmetic rather than trading — and plenty of comfortable ones stop being comfortable here.
If it survives that, ask which side of the ratio moved. Revenue too low is a pricing or volume problem, fixed at the price rather than the roster. Hours too high for what they produce is a rostering problem, and worth solving only once the price is right: tightening a roster underneath an underpriced service buys a worse client experience and no margin.
When both are true, price first, then staff to the level that price can carry.
Related: wages percentage in the dictionary · the longer piece on what to do about it
Australia — every ATO band on this page (20 rows)
For this ratio, we divide the labour amount by the turnover amount. The labour amount is calculated as follows: Total salary and wages expenses + Contractor subcontractor and commissions expenses − Payments to associated persons
| Industry | Annual turnover | Labour ÷ turnover |
|---|---|---|
| Hairdressers | $50,000 – $150,000 | 23% to 36% |
| Hairdressers | $150,001 – $300,000 | 25% to 37% |
| Hairdressers | More than $300,000 | 32% to 44% |
| Barber and men's hairdressing | $65,000 – $150,000 | 24% to 40% |
| Barber and men's hairdressing | More than $150,000 | 32% to 46% |
| Beauty services | $65,000 – $200,000 | 23% to 35% |
| Beauty services | $200,001 – $400,000 | 25% to 37% |
| Beauty services | More than $400,000 | 27% to 39% |
| Restaurants | $65,000 – $500,000 | 18% to 30% |
| Restaurants | $500,001 – $2,000,000 | 23% to 32% |
| Restaurants | More than $2,000,000 | 27% to 34% |
| Coffee shops | $65,000 – $250,000 | 21% to 32% |
| Coffee shops | $250,001 – $600,000 | 21% to 32% |
| Coffee shops | More than $600,000 | 27% to 35% |
| Electrical services | $50,000 – $200,000 | 21% to 35% |
| Electrical services | $200,001 – $500,000 | 17% to 30% |
| Electrical services | More than $500,000 | 23% to 34% |
| Plumbing services | $50,000 – $150,000 | 21% to 34% |
| Plumbing services | $150,001 – $600,000 | 16% to 27% |
| Plumbing services | More than $600,000 | 23% to 33% |
Hairdressers: These benchmarks don't apply to barbers or beauty services.
Beauty services: These benchmarks don't apply to hairdressers, barbers or tanning studios.
Coffee shops: These benchmarks don't apply to coffee carts, vans or other mobile coffee retailers.
Electrical services: These benchmarks don't apply to auto electricians or air conditioning specialists.
Businesses with turnover under $30,000 or over $15,000,000 are excluded, as are businesses reporting multiple activities on their tax returns and businesses trading less than one year.
Australian Taxation Office (ATO) · 2023–24 income year · read 2026-09-16 · methodology
New Zealand — every Stats NZ band on this page (24 rows)
Salaries and wages divided by turnover (sales and/or services plus interest received plus dividends plus rental and lease payments plus other income). This ratio represents the percentage of turnover income that is spent on labour costs. It can be an indicator of whether a business is spending too much or too little of its turnover income on staffing the business.
| Industry (ANZSIC06) | Size band by turnover | 25th | Median | 75th |
|---|---|---|---|---|
| Hairdressing and beauty services S951100 | Micro $60,000 – $99,000 | 0% | 0% † | 0% |
| Hairdressing and beauty services S951100 | Small $99,001 – $169,000 | 0% | 0% † | 25% |
| Hairdressing and beauty services S951100 | Medium $169,001 – $335,000 | 1% | 26% | 46% |
| Hairdressing and beauty services S951100 | Large $335,001 – $10,000,000 | 24% | 39% | 51% |
| Cafes and restaurants H451100 | Micro $60,000 – $249,000 | 0% | 11% ‡ | 30% |
| Cafes and restaurants H451100 | Small $249,001 – $506,000 | 16% | 29% | 39% |
| Cafes and restaurants H451100 | Medium $506,001 – $972,000 | 24% | 34% | 42% |
| Cafes and restaurants H451100 | Large $972,001 – $10,000,000 | 27% | 36% | 42% |
| Takeaway food services H451200 | Micro $60,000 – $180,000 | 0% | 0% † | 14% |
| Takeaway food services H451200 | Small $180,001 – $349,000 | 0% | 10% ‡ | 25% |
| Takeaway food services H451200 | Medium $349,001 – $665,000 | 10% | 21% | 30% |
| Takeaway food services H451200 | Large $665,001 – $10,000,000 | 19% | 27% | 32% |
| Electrical services E323200 | Micro $60,000 – $136,000 | 0% | 0% † | 0% |
| Electrical services E323200 | Small $136,001 – $259,000 | 0% | 0% † | 2% |
| Electrical services E323200 | Medium $259,001 – $653,000 | 0% | 9% ‡ | 24% |
| Electrical services E323200 | Large $653,001 – $10,000,000 | 11% | 22% | 32% |
| Plumbing services E323100 | Micro $60,000 – $161,000 | 0% | 0% † | 0% |
| Plumbing services E323100 | Small $161,001 – $345,000 | 0% | 0% † | 10% |
| Plumbing services E323100 | Medium $345,001 – $828,000 | 0% | 11% ‡ | 22% |
| Plumbing services E323100 | Large $828,001 – $10,000,000 | 12% | 22% | 31% |
| Automotive electrical services S941100 | Micro $60,000 – $166,000 | 0% | 0% † | 0% |
| Automotive electrical services S941100 | Small $166,001 – $329,000 | 0% | 0% † | 11% |
| Automotive electrical services S941100 | Medium $329,001 – $748,000 | 0% | 14% ‡ | 27% |
| Automotive electrical services S941100 | Large $748,001 – $10,000,000 | 14% | 23% | 31% |
† Half or more of the businesses in this band record a 0% salaries-and-wages ratio. That is not cheap labour — it is no payroll. The only worker is the owner, and the owner's labour is unpaid in the data.
‡ At least a quarter of the businesses in this band record a 0% salaries-and-wages ratio: no payroll, because the only worker is the owner. It is not cheap labour.
All businesses supplying financial statements and tax returns are included, where the turnover (total income) for those businesses is between $60,000 and $10 million. Industries are classified under ANZSIC06. Of 483 industries, 228 have enough businesses for reliable ratios in the 2025 edition.
Most of this data sits below the AES design level: "use this data with caution as it is not covered by our quality checks"; and "a business can have operations classified into more than one industry, which can affect the industry financial ratios produced. These ratios should be used with caution." Suppressed values are marked 'S', confidentialised 'C'. None of the rows carried here were suppressed or confidentialised.
Stats NZ (Statistics New Zealand); ratio data sourced from Inland Revenue tax data · 2025 financial year (Stats NZ) · read 2026-09-16 · Business performance benchmarker
What we could not get, and did not substitute
NOT OBTAINED — a New Zealand beauty services figure separate from hairdressing.
Stats NZ has one ANZSIC class, S951100 "Hairdressing and beauty services". There is no separate NZ beauty class, and no NZ barber class. Australia splits all three. No neighbouring industry was substituted.
There is no ATO "cafes and restaurants" industry.
The ATO publishes Restaurants, Coffee shops, Takeaway food services and Catering services as separate benchmarks with different turnover bands and different labour ranges. New Zealand publishes cafes and restaurants as a single class (H451100). The two countries' food-service figures cannot be placed side by side as like-for-like. Restaurants and Coffee shops are carried separately rather than inventing a blended AU number.
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If this number surprised you, there's usually a structural reason.