Turnover

Published Friday 24 July 2026

Table of contents

• What is turnover?
• Turnover vs profit
• What counts as turnover (and what doesn't)
• How to calculate turnover
• Why turnover matters for your business
• What is annual turnover?
• Other meanings of turnover
• Keep track of your turnover with Xero
• FAQs on turnover
• Related terms
• Learn more about turnover

Key takeaways

• Turnover is your total sales revenue before you take off any costs, so it's not the same as profit.
• You work it out by totalling your sales over a set period, then subtracting discounts, allowances and returns.
• In Ireland you must register for VAT once turnover passes €85,000 for goods or €42,500 for services in any 12-month period.
• Turnover also describes how quickly you sell stock, collect payments, use assets, or replace staff.

What is turnover?

Turnover is another word for sales revenue, the money your business receives from selling goods or services over a set period. You'll hear "turnover" more often in Ireland and the rest of Europe, while "revenue" or "sales" are common elsewhere.

It's one of the first numbers people look at when they want a quick sense of how big your business is and how fast it's growing.

Turnover vs profit

It's easy to mix up turnover and profit, but they measure different things. Turnover is your sales before any costs come out, while profit is what's left once you've paid your bills.

There are two profit figures worth knowing. Your gross profit is your turnover minus the cost of the goods you sold. Your net profit is what remains after all your other costs and taxes come out too.

So a business can have a high turnover and still make little profit if its costs are high. That's why you track both.

What counts as turnover (and what doesn't)

Turnover counts the income from your normal trading activity, that is, the sales you make from your main products or services. Some money that lands in your account isn't turnover, so it's worth knowing what to leave out.

Leave the following out of your turnover:

• interest you earn on savings
• money from subletting property or equipment, unless renting is your main business
• proceeds from selling business assets such as vehicles, tools or property
• funds you receive from investors or lenders
• VAT you collect on behalf of Revenue

How to calculate turnover

Working out your turnover is straightforward once you've picked the period you want to measure. Follow these 3 steps.

1. Choose the period you want to measure, for example a week, a quarter or a year.
2. Total your gross sales for that period.
3. Subtract any discounts, allowances and returns.

Turnover example

Here's how the calculation looks for a small tutoring business. Say you teach 60 students per week and charge €50 per lesson. Your weekly turnover is €3,000, because 60 x €50 = €3,000.

Why turnover matters for your business

Turnover is a headline figure that tells you and others how your business is performing. You'll come back to it in several situations.

• Tracking growth: comparing turnover across periods shows whether sales are rising or slowing
• Registering for VAT: in Ireland you must register for VAT once turnover passes €85,000 for goods or €42,500 for services in any 12-month period
• Applying for loans or funding: lenders and investors use turnover to gauge the size and health of your business
• Benchmarking: comparing your turnover with similar businesses helps you measure profitability and spot where you can improve

What is annual turnover?

Annual turnover is simply the sales revenue you collect over a 12-month period. Many businesses use their financial year, but you can measure turnover over any period that's useful, such as a month or a quarter.

Other meanings of turnover

Turnover has a few other meanings in business, and they describe how quickly something moves through your business rather than your sales. Here are the ones you're most likely to come across.

• Inventory (stock) turnover: how quickly you sell and replace your stock
• Accounts receivable turnover: how quickly you collect money customers owe you
• Employee (staff) turnover: how often people leave and you replace them
• Asset turnover: how well you use your assets to generate sales

Keep track of your turnover with Xero

Xero brings your sales together in one place, so your reports show your turnover as it builds up over any period you choose. You can see your turnover at a glance and check how you're tracking against your goals. Get one month free.

FAQs on turnover

Here are answers to some frequently asked questions about turnover.

Is turnover the same as profit?

No. Turnover is your total sales before costs, while profit is what's left once you've paid your costs and taxes.

Does turnover include VAT?

No. The VAT you charge customers is collected for Revenue, so it isn't part of your turnover.

Is turnover the same as revenue?

Yes. Turnover is another word for sales revenue, and it's used more often in Ireland and the rest of Europe.

What is annual turnover?

It's the total sales revenue you collect over a 12-month period, often your financial year.

When do I have to register for VAT in Ireland?

You must register once your turnover passes €85,000 for goods or €42,500 for services in any 12-month period, according to Revenue.

Related terms

• Profit
• Revenue
• Gross profit margin
• Profit margin

Learn more about turnover

• Small business accounting 101
• Financial statements
• How to measure profitability
• Money guides