Cost Allocation by Square Footage Calculator
Split a shared cost fairly across tenants or departments by area.
Result
How it is calculated
Common areas such as lobbies and hallways are not rentable, so the cost is split over the usable area only: usable = total area − common area. A unit's share is unit area ÷ usable area, and its allocated cost is total cost × share. The cost per square foot is the allocated cost divided by the unit's own area. The "grossed-up" area is unit area + common area × share, meaning the unit's own space plus its slice of the shared space. The remaining cost is what other units pay. The common-area field is required; enter 0 if there is none. A unit larger than the usable area gives no result. Any consistent area unit works, even though the fields say square feet.
Worked example
A building of 10000 sq ft has 1500 sq ft of shared space, so usable area is 8,500. A tenant rents 850 sq ft, and the shared cost is 12000. The share is 850 ÷ 8500 = 10.00%, so the tenant is allocated 12000 × 0.10 = $1,200.00. Cost per square foot of the tenant's own area is 1200 ÷ 850 = $1.41. The grossed-up area is 850 + 1500 × 0.10 = 1,000.00 sq ft. The other tenants carry $10,800.00. Ignoring the common area would give 8.50% and $1,020.00, so the tenant would pay $180 less.
Common mistakes
- Dividing by the total building area instead of the usable area: ignoring the common area under-charges every tenant, in this example 8.50% instead of 10.00%.
- Leaving the common-area field empty when there is none: the tool needs a number, so enter 0.
- Mixing units: if the building is in square metres, the unit's area must be too, otherwise the share is meaningless.
- Counting the unit's own space twice, by also including it in the common area.
- Using the grossed-up area as the unit area: it is an output, and putting it back in would charge for the shared space twice.
About this calculator
Cost allocation by square footage is the standard method landlords, property managers and cost accountants use to split a shared expense — rent, utilities, property tax, janitorial or common area maintenance (CAM) — among multiple tenants or departments in proportion to the floor area each one occupies. The core ratio is simple: a unit's share equals its square footage divided by the building's total leasable or occupied square footage, multiplied by the total cost. Commercial triple-net (NNN) leases typically add a gross-up step, prorating each tenant's share of common areas — lobbies, hallways, shared restrooms — on top of their private square footage.
Property managers use this method to bill CAM charges fairly across a shopping center or office building, while corporate accountants use the same logic internally to allocate rent or utility costs to departments sharing one facility, which matters for departmental budgeting and internal cost-center reporting. Because the split is driven entirely by area rather than headcount or usage, it works best for costs that genuinely scale with space — rent, property insurance, HVAC — rather than costs that scale with people or activity.
This calculator takes the total cost, each unit's square footage, the building's total area and its common-area square footage (enter 0 if there is none), and returns each tenant's or department's dollar share and percentage of the total.
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