Retail Turnover Rent Calculator
Essential for shopping centre tenants. Calculate your turnover rent obligations based on threshold breakpoints.
Lease & Revenue Details
Breakdown
Your sales are currently below the threshold. No turnover rent is payable.
What is Turnover Rent?
Turnover Rent (or Percentage Rent) is common in retail leases, especially within major Australian shopping centres (like Westfield, Vicinity, or Scentre Group). It means the landlord receives a base rent PLUS a percentage of your sales once you pass a certain "breakpoint" or threshold.
The Natural Threshold
A "Natural Threshold" is calculated by dividing your Base Rent by the turnover percentage. For example, if your rent is $70,000 and your turnover percentage is 7%, your natural threshold is $1,000,000.
Retail Leases Act Tip:
Under the Retail Leases Act in most Australian states, landlords are required to provide certain disclosures regarding how turnover is calculated. Ensure you understand what is included in "Gross Revenue" (usually excludes gift cards, returns, and GST).
Base Rent Modelling:
To accurately calculate and project your initial base rent and outgoings before turnover clauses kick in, use our comprehensive Commercial Rent Calculator Australia.
How turnover rent is calculated
Under a turnover rent clause the tenant pays base rent plus a percentage of sales above a threshold. The threshold is either natural, where the percentage of sales equals the base rent (base rent ÷ percentage), or a fixed dollar amount written into the lease.
A natural threshold rises automatically when base rent goes up. A fixed threshold only changes if the lease says so, so the same sales can trigger more turnover rent over time.
Worked example: a shop with $1,800,000 in sales
A retailer pays $90,000 base rent a year with a 6% turnover clause, and records $1,800,000 in gross sales for the year.
- Natural threshold ($90,000 ÷ 6%)
- $1,500,000
- Sales above the threshold
- $300,000
- Turnover rent (× 6%)
- $18,000
- With a fixed $1,200,000 threshold instead
- $36,000
- Total rent with a natural threshold
- $108,000
The same sales produce $18,000 more turnover rent under the $1,200,000 fixed threshold, so the threshold type matters as much as the percentage.
Common mistakes
Not checking how sales are defined
Leases define gross sales differently. Check whether GST, refunds, online orders and gift cards are included.
Assuming a fixed threshold keeps pace
If base rent rises each year but the threshold is fixed, turnover rent can start sooner than expected.
Forgetting the reporting obligations
Turnover clauses usually require regular sales reports and sometimes an audited annual statement, which has a cost.
Looking at turnover rent alone
Check total occupancy cost against sales too, since a high base rent can hurt more than the turnover component.