What is a profit and loss statement?

A profit and loss statement — also called an income statement — shows revenue less expenses over a period, and what profit is left. It covers a period of time. That is the key difference from a balance sheet, which shows a position at a single point in time.

What is the difference between gross, operating and net profit?

Gross profit is revenue less the direct cost of what you sold. It tells you whether your pricing and product costs work. Operating profit is gross profit less operating expenses. It tells you whether the business as a whole works. Net profit is what remains after interest and other non-operating items. It is what actually ends up yours.

Should figures be GST-inclusive or GST-exclusive?

GST-exclusive if you are registered for GST. GST you collect belongs to the ATO and is not revenue; GST you pay is recoverable and is not an expense. If you are not registered for GST, use the amounts you actually paid, since you cannot claim the credits.

What is a good labour cost percentage?

It varies a lot by industry and format, so the comparison worth making is against your own trend and your own budget rather than a published benchmark. What matters more is frequency. In a shift-based business labour cost percentage should be watched weekly, because it is driven by rostering decisions made weekly — and an annual statement reports the damage far too late to act on.

Why show every line as a percentage of revenue?

Because dollars do not compare and percentages do. A $4,000 increase in wages means something completely different in a $40,000 month and an $84,000 month. Percentages are also what let you compare across periods, sites or against an industry figure.

My gross profit looks fine but I have no money. Why?

Profit and cash are different things. You can be profitable and still short of cash if customers are slow to pay, if you are carrying stock, or if a quarterly BAS payment has just fallen due. Run a cash flow forecast alongside the P&L — they answer different questions and you need both.

How often should I produce one?

Monthly. A P&L produced once a year is a historical record; one produced monthly is a management tool. Monthly also makes errors far cheaper to find, because you are looking at four weeks of transactions rather than fifty-two.

Where do the figures come from?

From your ledger — each line is the total of the matching account for the period. If you are using the general ledger template, its trial balance sheet gives you those totals directly. Accounting software will produce a P&L for you; this template is useful for review, for rebuilding a period, or when you want to model something the software will not.

FREE EXCEL TEMPLATE Last updated 28 August 2026

Profit and loss template for Australian businesses

Revenue less cost of sales less operating expenses, with gross, operating and net profit calculated and every line shown as a percentage of revenue — including labour cost percentage, which is usually the number that decides the month.

Profit and loss template

Excel (.xlsx) · GST-exclusive · no signup

Three profit lines calculated

Every line as a % of revenue

Labour cost percentage highlighted

GST-exclusive, as it should be

General information only, not tax or accounting advice.

This template is general information for Australian businesses. GST treatment, account coding, reporting obligations and deduction eligibility depend on your circumstances — confirm them with your accountant, a registered BAS agent or the ATO. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.

References HR Hub disclaimer Modern Awards Fair Work

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What's in the profit and loss template

A statement structured so the three profit lines each answer a different question.

Revenue

Taxable sales, GST-free sales and other income, separated so your GST-free proportion stays visible.

Cost of sales

Stock, freight inwards and subcontractors — the direct costs of what you sold.

Gross profit

Revenue less cost of sales, with margin percentage. This is the line that tells you whether your pricing works.

Operating expenses

Sixteen expense lines, each shown as a percentage of revenue.

Labour cost percentage

Wages as a share of revenue, calculated on its own line — the single most useful ratio in a shift-based business.

Operating and net profit

Operating profit before interest, then net profit after. Both with margins.

The three profit lines, and what each one tells you

Same business, same month. Each line answers a different question.

Line	Amount	% of revenue	What it tells you
Revenue	$84,300	100%	What you sold
Gross profit	$52,900	62.8%	Whether your pricing works
Wages & salaries	$29,100	34.5%	Labour cost percentage
Operating profit	$9,400	11.2%	Whether the business works
Net profit	$8,150	9.7%	What is actually left

A 62.8% gross margin with a 34.5% labour cost leaves very little room. In hospitality that labour figure would be watched weekly — by the time an annual statement shows it, twelve months of it have already been paid.

Two things that make an Australian P&L different

Both are easy to get wrong, and both change the numbers materially.

GST-exclusive figures

If you are registered for GST, revenue and expenses go in GST-exclusive. GST collected is not revenue and GST paid is not an expense — both sit on the balance sheet until the BAS settles.

A July-to-June year

The Australian financial year runs 1 July to 30 June, so year-to-date comparisons and any annualised figure work from July.

Superannuation is an expense

Super guarantee sits in operating expenses alongside wages. Some overseas templates have no line for it at all.

Workers compensation too

A separate line, because the premium is driven by your wages and industry and is worth watching as a percentage.

Entering GST-inclusive figures overstates everything by about nine percent

This is the most common error in a self-prepared P&L. If you are registered for GST, a $1,100 sale is $1,000 of revenue and $100 of GST payable — not $1,100 of revenue.

Do it consistently across revenue and expenses and the profit figure is roughly right by accident, but every margin percentage is wrong and so is every comparison to a benchmark.

Who uses a profit and loss template

Small businesses reporting monthly

The one report worth producing every month, even when nothing else gets done.

Bookkeepers reporting to clients

P&L, cash position and aged debtors is the monthly pack most clients actually read.

Anyone benchmarking performance

Percentages, not dollars, are what let you compare this month to last or your venue to the industry.

For accountants & bookkeepers

Is labour cost the line your clients ask about most?

In hospitality, retail and care, wages as a percentage of revenue is the number that decides the month — and it moves with every roster. Advisors who bring shift-based clients onto RosterElf earn recurring monthly income for every employee managed.

Recurring monthly income

$1.00–$2.00 per active employee

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Definitions

Plain-English explanations of the terms used on this page.

General ledger

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