G&A Rate Calculator
/* Scoped CSS for the Calculator to prevent theme conflicts */
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border: 1px solid #e1e4e8;
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.ga-calc-header {
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"@type": "Question",
"name": "What is a G&A Rate?",
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"text": "The General and Administrative (G&A) rate is a percentage used to allocate a business's indirect costs—such as executive salaries, legal fees, and accounting—across its total cost base. It ensures that overhead expenses are covered by revenue-generating projects."
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"@type": "Question",
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"text": "The G&A Rate formula is: (Total G&A Expenses / Total Allocation Base) x 100. The allocation base is typically the Total Cost Input (TCI) or Value Added Cost Input."
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"@type": "Question",
"name": "What is included in G&A expenses?",
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G&A Rate Calculator
Calculate your General & Administrative expense ratio for cost accounting.
Total indirect costs for general management (e.g., executive salaries, HR, legal, finance).
Usually Total Cost Input (TCI): Direct Labor + Materials + Overhead + Subcontracts.
Please enter valid positive numbers for both fields.
Your Calculated G&A Rate
0.00%
Total G&A Pool:$0.00
Allocation Base:$0.00
Interpretation:
For every $1.00 of direct project costs, you incur $0.00 in G&A overhead.
function calculateGARate() {
// 1. Get input values strictly by ID
var expensesInput = document.getElementById("gaExpenses");
var baseInput = document.getElementById("allocationBase");
var errorMsg = document.getElementById("gaError");
var resultBox = document.getElementById("resultBox");
// 2. Parse values
var expenses = parseFloat(expensesInput.value);
var base = parseFloat(baseInput.value);
// 3. Validation Logic
if (isNaN(expenses) || isNaN(base) || expenses < 0 || base <= 0) {
errorMsg.style.display = "block";
resultBox.style.display = "none";
return;
}
// Hide error if validation passes
errorMsg.style.display = "none";
// 4. Calculate Rate
// Formula: (Expenses / Base) * 100
var rate = (expenses / base) * 100;
var cents = (expenses / base).toFixed(2);
// 5. Update DOM
document.getElementById("gaRateResult").innerHTML = rate.toFixed(2) + "%";
// Format currency for display
var currencyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById("displayPool").innerHTML = currencyFormatter.format(expenses);
document.getElementById("displayBase").innerHTML = currencyFormatter.format(base);
document.getElementById("centsPerDollar").innerHTML = "$" + cents;
// Show result box
resultBox.style.display = "block";
}
Understanding the G&A Rate Calculator
The General and Administrative (G&A) Rate is a critical financial metric used primarily in government contracting (GovCon), manufacturing, and professional services. It represents the percentage of a company's general operating costs that must be allocated to direct revenue-generating activities to ensure profitability.
Formula:
G&A Rate = (Total G&A Expense Pool ÷ Total Allocation Base) × 100
1. What goes into the G&A Expense Pool?
The "Pool" consists of indirect expenses that benefit the business as a whole but cannot be directly attributed to a specific project or contract. Common items include:
Executive Salaries: CEO, CFO, and other top-level management.
Professional Services: Legal retainers, external accounting, and auditing fees.
Administrative Functions: Human Resources (HR), payroll processing, and IT support for the corporate office.
Business Development: Costs associated with bidding on new contracts (bid and proposal costs).
Corporate Facilities: Rent and utilities for the headquarters (distinct from factory or site overhead).
2. Defining the Allocation Base
To calculate a percentage, you must divide your pool by a "base." The most common base used is the Total Cost Input (TCI). TCI usually includes:
Direct Labor costs.
Direct Material costs.
Other Direct Costs (ODC).
Manufacturing or Services Overhead (Fringe benefits and site overhead).
Note: Some companies use a "Value Added" base, which excludes material and subcontract costs, though TCI is standard for many organizations.
3. Why is an accurate G&A Rate important?
If your G&A rate is calculated incorrectly, two risks emerge:
Under-bidding: If you underestimate your G&A, you may win contracts but lose money because your revenue won't cover your corporate overhead.
Over-bidding: If you overestimate your G&A, your total price becomes too high, and you lose competitive bids to leaner companies.
Example Calculation
Imagine a software consulting firm with the following annual financials:
Total G&A Expenses: $500,000 (Rent, CEO salary, Legal).
Total Allocation Base: $2,500,000 (Total costs of all projects).
Using the calculator above:
($500,000 ÷ $2,500,000) × 100 = 20%
This means for every dollar the company spends on a project, they must add $0.20 to cover their corporate overhead.
G&A vs. Overhead: What's the difference?
While often used interchangeably, they are distinct in cost accounting. Overhead usually refers to indirect costs related to production (e.g., factory electricity, supervisor salaries), while G&A refers to the indirect costs of running the business entity itself (e.g., corporate accounting, strategic planning).