Calculate your General and Administrative expense rate percentage.
G&A Expense Pool (Indirect Costs)
$
$
$
$
$
Allocation Base (Total Direct Costs)
$
This is the denominator for your rate calculation.
Calculated G&A Rate
0.00%
Understanding the G&A Rate Calculation
The General and Administrative (G&A) rate is a critical financial metric used primarily in government contracting, manufacturing, and professional services firms. It represents the percentage of overhead costs required to operate the business that cannot be directly attributed to a specific project or product unit.
What are G&A Expenses?
G&A expenses are the "top-level" overhead costs of running a company. Unlike manufacturing overhead, which supports the production floor, G&A supports the entire organization. Common examples include:
Executive Compensation: Salaries for the CEO, CFO, and other top management not billing directly to projects.
Professional Services: Legal retainers, external auditing, and tax preparation fees.
Corporate Infrastructure: Rent for the headquarters, corporate insurance policies, and business licenses.
Business Development: Costs associated with bid and proposal preparation (unless treated as a separate pool).
The G&A Rate Formula
To calculate the G&A rate, you must first determine your "G&A Expense Pool" (the numerator) and your "Allocation Base" (the denominator). The formula is:
The choice of the allocation base is crucial for accuracy and compliance (especially for DCAA audits). The base represents the total direct activity of the company. The most common bases are:
Total Cost Input (TCI): This includes Direct Labor, Direct Materials, and Manufacturing Overhead/Fringe Benefits. It is the most common base for calculating G&A.
Value Added Cost Input: Sometimes excludes material costs if they are pass-throughs with little administrative burden.
Single Element Base: Occasionally, G&A is applied only to Direct Labor, though this is less common for general corporate expenses.
Why is a Precise G&A Rate Important?
Calculating an accurate G&A rate ensures that a company recovers all its indirect costs through its pricing. If the rate is underestimated, the company loses profit on every contract. If overestimated, the company's pricing may become uncompetitive. For government contractors, maintaining a consistent and justifiable G&A rate is a mandatory requirement for cost-reimbursable contracts.
function calculateGARate() {
// Get values from G&A Expense Pool inputs
var execSalaries = parseFloat(document.getElementById('execSalaries').value) || 0;
var legalFees = parseFloat(document.getElementById('legalFees').value) || 0;
var rentUtilities = parseFloat(document.getElementById('rentUtilities').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var otherGA = parseFloat(document.getElementById('otherGA').value) || 0;
// Sum up total G&A Expenses
var totalGAExpenses = execSalaries + legalFees + rentUtilities + insurance + otherGA;
// Get Allocation Base
var baseCosts = parseFloat(document.getElementById('baseCosts').value) || 0;
// Get result elements
var resultBox = document.getElementById('resultBox');
var gaRateResult = document.getElementById('gaRateResult');
var totalPoolResult = document.getElementById('totalPoolResult');
// Validation logic
if (baseCosts <= 0) {
resultBox.style.display = 'block';
gaRateResult.innerHTML = "–";
totalPoolResult.innerHTML = "Error: Allocation Base must be greater than $0.";
totalPoolResult.style.color = "#e53e3e";
return;
}
// Calculation
var rate = (totalGAExpenses / baseCosts) * 100;
// Display Logic
resultBox.style.display = 'block';
gaRateResult.innerHTML = rate.toFixed(2) + "%";
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
totalPoolResult.innerHTML = "Total G&A Pool: " + formatter.format(totalGAExpenses) + "" +
"Allocation Base: " + formatter.format(baseCosts);
totalPoolResult.style.color = "#4a5568";
}