Enter the Total G&A Expenses and Total Direct Costs into the calculator to determine the G&A Rate. This calculator can also evaluate any of the variables given the others are known.
G&A Rate Formula
The following formula is used to calculate the G&A Rate.
G&A Rate = (Total G&A Expenses / Total Direct Costs) * 100Variables:
- G&A Rate is the General and Administrative expense rate (%)
- Total G&A Expenses are the total overhead costs not directly tied to the production process ($)
- Total Direct Costs are the total costs directly associated with producing a product or service ($)
To calculate the G&A Rate, divide the total G&A Expenses by the total Direct Costs. Multiply the result by 100 to convert the rate into a percentage. This will give you the proportion of indirect overhead costs in relation to the direct costs associated with producing a product or service.
What is a G&A Rate?
A G&A rate, or General and Administrative expense rate, is a financial metric used by businesses to determine the proportion of indirect overhead costs in relation to the direct costs associated with producing a product or service. These overhead costs can include salaries, utilities, rent, and other expenses necessary for the overall operation of a business but not directly tied to the production process. The G&A rate is typically expressed as a percentage and is used for budgeting, pricing, and financial analysis purposes.
How to Calculate G&A Rate?
The following steps outline how to calculate the G&A Rate.
- First, determine the Total G&A Expenses ($).
- Next, determine the Total Direct Costs ($).
- Next, use the formula G&A Rate = (Total G&A Expenses / Total Direct Costs) * 100.
- Finally, calculate the G&A Rate.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem:
Use the following variables as an example problem to test your knowledge.
Total G&A Expenses ($) = 5000
Total Direct Costs ($) = 25000
