AMP Bank Go on Tuesday released its inaugural Small Business Cost Pressure Index, which indicates that key business costs climbed by 24.6 per cent from March 2020 to March 2026, and are on track to jump by a total of 27.1 per cent by year-end.
"We want to cast a light on how their small businesses are doing it tough," AMP Bank Go director John Arnott said.
Small businesses are integral to the fabric of their community, offering choice and convenience for everyday Australians, but they are finding it really tough to contain these price increases given their razor-thin profit margins, he said.
"Particularly those at the really small end of town, they're the ones that are struggling the most."
The report found that small businesses' insurance costs have jumped by 51.7 per cent since March 2020, their interest payments are up 36.3 per cent and their cost of paying wages have climbed by 20.3 per cent.
Wages compromised half of the weighting of the index, since many small businesses rely heavily on labour.
Tara Amuso, who runs a small bricklaying business in central Victoria with her husband Damian, told AAP it had been their worst year since starting the company six years ago.
"Everyone's feeling the pinch. It's just brutal," she said.
Changes in employment law have meant that workers who previously were classified as subcontractors and who could be paid a fixed amount are now treated as employees, Ms Amuso said.
"Which then comes as a lot of overheads," she said.
A worker might be paid $50 an hour, but their company's cost is more like $70 an hour, "which does add up", she added.
"The rates that we're out there charging and what the expectations are for rates in the industry are very different to what the actual cost of running a business is," she said. "We've definitely struggled."
AMP Bank Go said that small business owners have told them they are absorbing higher costs through lower margins, longer hours, delaying investment and taking less out of the business themselves, rather than fully passing on costs to customers.
AMP's research indicated that the number of micro-businesses - those with one to four employees - has fallen by 38,587 since 2021/22, dropping to 688,870, which indicates the pressure such tiny businesses are under.
AMP launched AMP Bank Go, a digital-first bank aimed as small businesses and sole traders, in February 2025.
