Operating Expense Calculator

Reviewed By: Scott Hickam (MBA, Finance)

Enter your operating expense items (such as salaries, commissions, marketing, rent, utilities, and other operating costs) for the chosen period into the calculator to estimate total operating expense.

Business OPEX

Expense Ratio

Expense per Unit

Real Estate NOI

Enter values for your chosen period. Calculate to see Operating Expense, Operating Income, and margins.

PeriodRevenue ($)Cost of Goods Sold (COGS) ($)Salaries ($)Payroll Taxes & Benefits (% of Salaries)Commissions ($)Advertising/Marketing ($)Rent/Building Costs ($)Utilities ($)Software/Subscriptions ($)Travel ($)Insurance ($)Other Expense LabelOther Expense Amount ($)Other Expense LabelOther Expense Amount ($)Operating Expense ($)

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Operating Expense Formula

The operating expense (OPEX) of a business is generally the sum of its operating cost categories for a period. A simplified example formula (using only a few common categories) is shown below.

OE = S + C + A + R + U + O

Where OE is total operating expense for the period
S is salaries/wages included in operating expenses
C is commissions
A is advertising/marketing cost
R is rent or building/occupancy costs
U is utilities
O is other operating expenses (for example: insurance, software, repairs/maintenance, office/admin costs, professional fees, etc.)

To calculate operating expenses for a period, add up all operating expense categories you’re including for that same period (businesses and industries can classify items differently, and some costs may instead be treated as COGS).

Operating Expense Definition

Operating expenses (OPEX) are the ongoing costs a business incurs to run its normal operations during a period (often selling, general, and administrative costs). They typically exclude cost of goods sold (COGS) and usually exclude interest expense and income taxes.

Operating Expense Example

How to calculate operating expense?

First, determine the total salaries.
Calculate the total operating salaries/wages for the period (for example, administrative and sales staff).
Next, determine the advertising cost.
Calculate the advertising/marketing cost for the same period.
Next, determine the total commissions.
Calculate the total commissions on all sales for the period.
Next, determine the building cost and utilities.
Calculate rent/occupancy costs and utilities for the period (and include any other operating expense categories you want to count, such as insurance, software, or maintenance).
Finally, calculate the operating expense.
Add the included operating expense categories together to get total operating expense for the period.

FAQ

What is operating expense?

Operating expense (OPEX) is the ongoing cost of running a business during a period (for example, rent, utilities, marketing, and administrative payroll). It is typically shown separately from cost of goods sold (COGS), and it usually excludes interest and income taxes.