how much would commission need to rise to cover the 1.5%???

Hey All

Public holidays can be boring so I've tried to do a few sums

This is all based on the only available figures I've seen (Andrew Twaits figures produced in court)

Pre 1.5% - Gross Profit $625,000 (rounded) - 56% margin on gross revenue (roughly gross revenue of $1.1 million)

Post 1.5% - Gross Profit $46,000 - 2% margin on gross revenue

assuming the difference between the two figures is the 1.5% turnover tax - that tax would be approximately $580,000

meaning turnover would be approximately - rough rounded figures $40 million for the 7 months in question (does that sound a bit low???)

this would mean average commission of 2.75% ($40 million divided by gross revenue of $1.1 million - assuming gross revenue = turnover * commission)

stick with me here

so in kind of accounting terms (I did some at TAFE many years ago) Gross Profit = Gross Revenue - Cost of Goods Sold (COGS)

So on the original figures - Gross Profit $625,000 = Gross Revenue $1.1 million - COGS ($475,000)

with the 1.5% tax on turnover - COGS increases by the tax - i.e. $580,000 to $1,055,000 (roughly)

so to maintain the same Gross Profit

Gross Profit $625,000 = Gross Revenue $1,680,000 - COGS $1,055,000

So Turnover = $40,000,000 and Gross Revenue needs to be $1,680,000 therefore the commission rate needs to average

drumroll

4.2%

which is an increase of roughly 1.5% - what the???  I did all this to work out that the turnover tax and increase in commission would be the same???    am I wrong???

well actually it means the average commission would need to go up roughly 53%

I'm in holdiday mode and my brain is only half working, does someone want to chech my figures???

note - there are plenty of assumptions in these figures