How this is calculated

• Trade type — selects which industry benchmark we compare you against.
• Annual income — last 12 months' total turnover (ex-GST).
• Team size (No. of employees) — including you. Part-timers count as 0.5.
• Annual wages — total gross wages paid through payroll last 12 months. If you're not on payroll, you'll be prompted to enter an estimated market salary for your role, which gets added to the wages figure for an accurate labour cost calculation.
• Subcontractor costs (optional) — when entered, these are excluded from your revenue before any calculations run. This means your labour percentage and revenue per person reflect only what your own team generates. The benchmarks do not change — the revenue adjustment is what makes the comparison accurate.

All-in wages   = wages × 1.25            (ACC, KiwiSaver, leave, public holidays)
Adj. revenue   = revenue − sub costs     (only when subbies entered)
RPE            = adj. revenue ÷ headcount
Labour %       = all-in wages ÷ adj. revenue
Ideal team size = adj. revenue ÷ benchmark midpoint
Gap            = headcount − ideal team size
Profit leak    = gap × (all-in wages ÷ headcount)   when gap > 0

The 1.25× wage loading is a rule-of-thumb for the real cost of an employee in NZ once ACC, KiwiSaver, annual leave and public holidays are factored in. Your actual loading might be a bit higher or lower depending on how you treat owner draws and what you provide.

The profit leak figure assumes an average cost per person across your team. Businesses with a wide spread between owner salary and staff wages may see a different real figure.

When subcontractor costs are entered, adjusted revenue is used in all calculations. The benchmark ranges remain the same regardless.

Labour % of revenue is the primary measure used to determine your status result. Revenue per employee is a reference point only and does not affect your status.

These ranges are calibrated for owner-operated trades businesses with 2–15 staff, based on SME Collective's analysis of NZ trades businesses cross-referenced against Stats NZ Annual Enterprise Survey 2024 data. For context, AES industry-wide averages for revenue per employee are significantly higher ($364k for construction services, $677k for residential building) because they include large firms — the ranges above are set to reflect the cost structures of smaller owner-operated businesses where labour is the primary cost driver. They are a starting point for the conversation — not a hard rule.

• On track (green) — labour % is at or within the benchmark maximum for your trade type.
• Worth a look (amber) — labour % is above the benchmark maximum by up to 5%.
• Time for a closer look (red) — labour % is more than 5% above the benchmark maximum.

Your revenue per employee and team size relative to the revenue benchmark (FTE gap) are shown on your results page as a reference point. They do not determine your status — but they give useful context about whether your headcount is matched to your revenue.

A few numbers can't capture a whole business. Results may not reflect your reality if any of these are true:

• Big seasonal swings in revenue or workload.
• Project-based income (a single large job distorting the year).
• Unusual gross margins — high-margin work needs less labour leverage.
• Equipment-heavy businesses where plant hire or ownership costs are a significant portion of revenue — labour % benchmarks may sit lower than shown.
• Regional cost-of-labour differences.

This is why the result is a starting point for a conversation, not a verdict. If the numbers don't feel right, they probably aren't telling the whole story — but they're usually pointing at something worth looking at.