Turnover

Published Friday 24 July 2026

Table of contents

• Turnover meaning in business
• Turnover vs profit
• What turnover is not
• How to calculate turnover
• Reporting turnover
• What is annual turnover?
• Other meanings of turnover in business and accounting
• Why turnover matters
• Track your turnover with Xero
• FAQs on turnover
• Related terms
• Learn more about turnover

Key takeaways

• Turnover is the total sales revenue your business brings in over a set period.
• Turnover is not profit, because it measures sales before you take off any costs.
• You work out turnover by adding up all sales of goods and services over the period.
• Turnover can also describe employee turnover, inventory turnover, and accounts receivable turnover.

Turnover meaning in business

Turnover is another word for sales revenue: the money your business receives from selling goods or services over a period. It counts the value of what you sell before you subtract any costs.

Turnover is used more widely in Europe and Asia, while North Americans tend to say revenue or 'sales' for the same thing. When your turnover rises, you are bringing in more money from sales.

Turnover vs profit

Turnover and profit measure different things, so it helps to keep them apart. Turnover is the money coming in from sales before any costs, while profit is what's left after you take those costs off.

There are two common types of profit. Your gross profit is revenue minus the cost of goods sold, and your net profit is gross profit minus all other operating expenses and taxes.

You may sometimes see the phrase 'net turnover' used to mean profit. To avoid confusion, it's safest to treat turnover as your sales revenue.

What turnover is not

Turnover covers your sales, so some money that flows into your business sits outside it. The following income is not part of turnover:

• interest earned on savings
• money from subletting property or equipment, unless you run a rental business
• proceeds from selling business assets like vehicles, tools or property
• money received from investors or lenders

How to calculate turnover

You calculate turnover by adding up the value of everything you sell over a chosen period. A short worked example shows how simple this can be.

Turnover example

Say your business teaches 60 students per week and charges RM50 per lesson. Your weekly turnover is RM3,000, because 60 x RM50 = RM3,000.

Turnover is the total sales of goods and services over the period you're measuring.

Reporting turnover

Turnover appears in your accounts alongside your other trading figures. You record it on your profit and loss (P&L) statement under 'sales revenue'.

Bank deposits may reflect your turnover, but credit sales are different. A credit sale doesn't show in your bank until the customer pays.

What is annual turnover?

Annual turnover is your sales revenue over a 12 month period. You can also measure turnover over any period that's useful to you, such as a week, a month or a quarter.

In Malaysia, annual sales turnover is one measure used to size businesses. SME Corporation Malaysia defines small and medium enterprises partly by annual sales turnover.

Other meanings of turnover in business and accounting

Turnover isn't only about sales, and you'll come across it in a few other places. Here are three common meanings:

• employee turnover: how often staff leave a business and need replacing
• inventory turnover: how often you sell and replace your stock
• accounts receivable turnover: how quickly you collect payments from customers

Why turnover matters

Tracking turnover gives you a clear read on how your sales are trending. It helps you spot growth or decline early, and it feeds into your pricing and cost decisions.

Turnover also shapes your view of cash flow and helps you understand your business size for funding or tax. Pairing it with profit lets you measure profitability and make confident decisions.

Track your turnover with Xero

Xero accounting software brings your sales into one place and updates your figures as you go. You can see your turnover in real time and check where your money comes from when you get one month free.

FAQs on turnover

Here are some frequently asked questions about turnover to clear up the points people often wonder about.

Is turnover the same as revenue?

Yes, turnover and revenue describe the same thing: your total sales over a period. The word you'll hear depends on where you are, as many regions outside North America prefer 'turnover'.

Is turnover the same as profit?

No, turnover is your sales before costs, while profit is what remains after costs. A business can have high turnover and still make little or no profit.

What is employee turnover?

Employee turnover measures how often staff leave your business over a period. A high rate can point to recruitment or retention costs that are worth watching.

Is turnover calculated before or after tax?

Turnover is your sales revenue, so you count it before any tax or costs. Tax and expenses come into play later, when you work out your profit.

Related terms

• Profit
• Profitability
• Cash flow statement
• Break-even point

Learn more about turnover

• Financial statements
• Cash flow management
• Profit margin
• How to increase profits