The industry's own benchmarking data has put a number on what separates a profitable gym from a struggling one. It is payroll, and the gap is ten points.
In the 2026 Fitness Industry Benchmarking Report, published on October 7, the Health and Fitness Association reports that "payroll costs represented 32.4% of revenue among high-profit operators, compared with 42.5% among lower-profit businesses."
Same industry, same year, same cost line. Ten points apart.
What the report actually measured
The data comes from 244 operators running nearly 27,000 facilities across 40 countries, who submit confidential financial and operating figures. It is one of the few places in this business where real P&L data gets pooled.
The headline numbers were strong and we have covered them before. Median revenue rose 10.7% in 2025 and the median EBITDA margin (earnings before interest, tax, depreciation and amortisation, roughly the cash a business throws off before financing and accounting choices) reached 22.1%, figures we used when True Fitness collapsed in Singapore the same week they were published. Nearly two thirds of operators increased earnings.
The payroll split is the new material, and it is the more useful half.
One caveat worth stating plainly: the full report is available to HFA members only. Everything here comes from the public release.
Does this mean you should cut staff?
No, and the report contains the number that proves it. High-profit operators generated roughly 21% more revenue per full-time employee than lower-profit ones. They are not paying fewer people or paying them less. They are getting more revenue out of each person they employ. Cutting heads lowers the payroll percentage for one quarter and lowers revenue per employee at the same time, which is the opposite of what the profitable operators are doing. The ratio is an output, not a lever.
Why a cost line is really a revenue problem
Payroll as a share of revenue has two inputs, and most operators only ever pull on one of them.
| High-profit operators | Lower-profit operators | |
|---|---|---|
| Payroll, share of revenue | 32.4% | 42.5% |
| Revenue per full-time employee | About 21% higher | Baseline |
| What that implies | More revenue per person on the floor | More people per pound of revenue |
Look at the same staff member through both columns. In the first, a trainer's hours are mostly billable or mostly spent converting members who then stay. In the second, the same wage buys cover: a desk staffed because it has always been staffed, a class that runs at four because it has always run at four.
That is why this number is so hard to move by cutting. The shape of the schedule, the mix of paid and unpaid hours, and what a member is worth all sit upstream of it.
Three things to check this week
Work out your own number first. Total payroll, including your own salary and any contractor spend, divided by total revenue. Most operators have never calculated it, and the ones who have usually guessed low. You need to know which side of 42.5% you are on before anything else is worth doing.
Find the hours that are pure cover. Not the people, the hours. Every schedule has slots that exist because of precedent rather than demand. Those hours are where the ten points live, and they can often be moved rather than cut.
Then work the top of the ratio. We have written about revenue per member as the lever that moves without adding bodies, and it is the same arithmetic from the other end. Raising what a member is worth improves the payroll ratio without anyone losing a shift.
There is a harder version of this question underneath, which we have run at before: the industry says it cannot find trainers while paying what it pays. The benchmarking data does not settle that argument, but it does reframe it. The profitable operators are not the ones spending least on people. They are the ones whose people are attached to revenue.
Ten points of margin is the difference between a business that compounds and one that survives. It is sitting in a line most operators treat as fixed.