Australian restaurants turning over A$65,000 to A$500,000 report rent at 11% to 17% of turnover, and the band falls to 6% to 9% once turnover passes A$2 million, on the ATO's own benchmarks built from lodged 2023-24 tax returns. Skai Solutions works with venues in Australia and New Zealand, and the figure that matters more than the rent line itself is what sits underneath it: at the small end, stock, wages and rent together take 73% of turnover before a single other bill is paid.
Almost every occupancy benchmark an operator finds online is American, which is why the numbers never look right. The Australian figures below come from the ATO Small Business Benchmarks, drawn from lodged tax returns and published by turnover band, and there is no New Zealand equivalent, which is said plainly further down rather than papered over.
The ATO Small Business Benchmarks for restaurants are built from lodged 2023-24 tax returns and the page was last updated on 16 March 2026. They publish rent as a share of turnover in three bands, and the band you are in is decided by your turnover, not by your suburb.
| Annual turnover | A$65,000 to A$500,000 | A$500,001 to A$2m | Over A$2m |
|---|---|---|---|
| Rent / turnover | 11% to 17% | 8% to 12% | 6% to 9% |
| Labour / turnover | 18% to 30% | 23% to 32% | 27% to 34% |
| Cost of sales, average | 35% | 35% | 34% |
| Total expenses, average | 84% | 88% | 91% |
Two things to hold onto before you compare yourself to it. This row is rent alone, not the wider occupancy cost, so outgoings, rates, building insurance and any percentage rent sit outside it and your real occupancy number is higher. And these are figures businesses reported on their own returns, so they describe what the industry does, not what it should do. The ATO says plainly that being outside a range does not make a business wrong, only that there may be room to improve.
The coffee shops benchmark is a separate table with different turnover bands, and it excludes carts, vans and mobile coffee retailers. Rent runs 10% to 17% of turnover under A$250,000, 8% to 14% between A$250,001 and A$600,000, and 6% to 10% above A$600,000.
The shape is the same but the crossover happens at a quarter of the turnover. A cafe reaches the bottom rent band at A$600,000 while a restaurant has to reach A$2 million. That is worth knowing if you are choosing between formats on the same tenancy: the cafe gets its rent under control at a much lower trading level, and it does it because cost of sales is higher and average spend is lower, so the same rent is spread over more transactions.
Because rent is close to a fixed number and turnover is not. Doubling covers on the same floor does not double the lease. That part is obvious. The part that is not obvious is where the money goes instead.
This is our own arithmetic off the table above, so the inputs are all visible. Take the midpoint of each restaurant band. Rent falls from 14% of turnover at the small end to 7.5% at the large end, a drop of 6.5 percentage points. Labour rises from 24% to 30.5%, a rise of 6.5 percentage points. Point for point, the money you stop paying the landlord you start paying the payroll.
And you do not come out ahead. Average total expenses climb from 84% of turnover in the smallest band to 88% and then 91%, so the net result of growing a restaurant in Australia, on the industry's own reported figures, is that the margin gets thinner. Our page on restaurant profit margin in Australia works that through: about 16% at the small end against 9% above A$2 million.
Stack the midpoints for the smallest restaurant band and you get a number worth writing on a wall. Cost of sales 35%, labour 24%, rent 14%. That is 73% of turnover committed before you have paid for electricity, gas, waste, insurance, accounting, repairs, card fees, delivery commission or a single hour of your own time. Against average total expenses of 84%, everything else in the business has 11 points to live in.
Which is why the small leaks are not small. A delivery marketplace commission sits inside that 11 points, and so does an unanswered phone. Our pages on delivery app commission fees and restaurant food cost percentage cover the two biggest of them.
Fifteen minutes, your numbers, and the calls that never reached a table.
Book a Free DemoNo, and it is worth saying that plainly rather than borrowing a number that does not fit. There is no published New Zealand occupancy cost benchmark for hospitality at the level of detail the ATO gives Australian operators. The closest sources are the Restaurant Association of New Zealand's annual Hospitality Report, which puts wage costs at about 40% of hospitality revenue, and the MBIE hospitality sales dataset, which models ANZ card transactions down to territorial authority level but stops at sales rather than costs.
So a New Zealand operator has a good national picture of the top line and almost nothing on the cost side. In practice most use the Australian bands as a rough guide, which is defensible for rent because commercial leasing works similarly, and is not defensible for labour because the wage floors are set by different instruments. Our page on hospitality wages in New Zealand covers that side properly.
Search for a restaurant occupancy benchmark and the results are almost entirely from the United States. The National Restaurant Association reported occupancy costs above 5% of sales for 2024. Set that next to an Australian small restaurant reporting a rent midpoint of 14% of turnover, before outgoings, and the gap is close to threefold.
Do not read that as Australian operators being bad at negotiating. Two structural things drive it. American figures are weighted by large chains with high turnover per site, which is the equivalent of our over A$2 million band, and that band reports 6% to 9%. And the US number counts a wider basket that is often spread across owned property. The honest comparison is band to band, not headline to headline, and band to band the difference is a lot smaller than it looks.
The percentage is a ratio, so there are only two levers, and one of them is usually shut.
Which is where an unanswered phone stops being a service issue. A booking that rings out is turnover you have already paid the rent on. At the small band midpoint you are carrying 14% of turnover in rent whether the table sits full or empty, so every recovered booking lands against a cost you cannot avoid.
Skai Solutions sells an AI receptionist for exactly that gap, and it goes live in five days. Be honest about whether it is your gap. If your phone is quiet and your problem is that Tuesday is dead, a phone agent will not fix Tuesday, and our page on the cheapest way to answer the restaurant phone lists the free options first for that reason.
On ATO benchmarks from 2023-24 returns, 11% to 17% of turnover for an Australian restaurant turning over A$65,000 to A$500,000, 8% to 12% between A$500,001 and A$2 million, and 6% to 9% above A$2 million. That row is rent alone, so add outgoings to get your true occupancy cost.
Rent plus the costs of holding the premises: outgoings, council rates, building insurance, and any percentage rent clause. The ATO benchmark publishes rent only, so it is the floor of your occupancy cost rather than the whole of it.
On the ATO tables a cafe reaches the lowest rent band at A$600,000 of turnover against A$2 million for a restaurant, and average total expenses in the smallest coffee shop band are 79% against 84% for the smallest restaurant band. Cost of sales runs higher for cafes, at an average of 38% against 35%.
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More: what labour should cost as a percentage of turnover, hospitality award rates in Australia, or what a restaurant phone system costs.