What is General and Administrative Expenses?
General and administrative (G&A) expenses are operating costs incurred to run a business that are not directly tied to producing goods, selling them, or delivering services. They typically include corporate management, finance, HR, IT, legal, and office overhead.
How It Works
- Define the chart of accounts categories — salaries, rent, utilities, professional fees, IT, depreciation.
- Record each cost in the period in which it is incurred under the accrual basis.
- Allocate shared costs across cost centres if needed for management reporting.
- Compare G&A to revenue to monitor cost discipline.
- Disclose G&A as a separate line in the income statement or in the notes.
Saudi Context
ZATCA treats most G&A expenses as deductible for income tax provided they are documented and related to the taxpayer’s business. Saudi listed companies disclose G&A separately on the income statement, and external auditors test material balances.
Example
A company reports G&A of SAR 5M, broken down into salaries SAR 3M, rent SAR 800K, IT SAR 600K, professional fees SAR 400K, and other SAR 200K — about 5% of its SAR 100M revenue.