Office Occupancy Cost Calculator: Total Cost for Each Seat a Month

What it calculates

From your own figures, the calculator works out the total monthly cost of occupying an office and shows:

• the running costs each month;
• the one-time costs (fit-out, furniture and IT) spread over each month of the term;
• the total occupancy cost each month, and over the whole term;
• the cost for each seat a month;
• the cost for each person served a month, at your peak attendance;
• the cost for each sq ft a month, if you enter the area;
• the security deposit, shown separately because it is refundable.

It contains no rents or rates. Every money field is yours and starts blank. The calculator stores nothing.

Inputs

Monthly costs, from your term sheet and bills:

• Rent, CAM / maintenance, parking, utilities and electricity, and other monthly costs such as housekeeping, security, insurance and internet.

One-time costs, from your quotations:

• Fit-out, and furniture and IT.
• Security deposit: entered so it can be shown, but not added to the cost.

Your office:

• Seats, and optionally the area in sq ft.

In the assumptions panel:

• Spread one-time costs over: years, usually the lease term or the time you expect to stay. Starts at 5.
• Interest or discount rate: optional, your own cost of money. Blank spreads the one-time costs evenly with no interest.
• Peak attendance: the share of people in the office on the busiest day. Starts at 100%, one seat for each person.

Method

1. Running costs = rent + CAM + parking + utilities + other.
2. One-time costs = fit-out + furniture and IT.
3. One-time costs a month = one-time costs ÷ months in the term, or, with an interest rate, the level monthly payment: one-time costs × i ÷ (1 − (1 + i) ^ −months), where i = the yearly rate ÷ 12.
4. Total a month = running costs + one-time costs a month.
5. Cost for each seat = total ÷ seats.
6. People served = seats ÷ peak attendance; cost for each person = total ÷ people served.
7. Cost for each sq ft a month = total ÷ area.
8. The security deposit is shown on its own. With an interest rate, the interest it could have earned (deposit × yearly rate ÷ 12) is shown as a note, not added.

Assumptions

Limitations

• It treats running costs as flat. Rent and CAM usually rise during a lease. Use the rent escalation calculator to find the average effective monthly rent over the term and enter that as the rent.
• It ignores any value left at the end. Furniture and IT may still be usable after the term; spreading their full cost over the lease overstates the monthly figure.
• It does not include tax effects. GST credits, depreciation and the accounting treatment of the lease are matters for your chartered accountant.
• It leaves out costs you do not enter. Moving, reinstatement at the end of the lease, brokerage, stamp duty and registration are only included if you add them.
• Peak attendance is your estimate. If attendance rises, the cost for each person served moves towards the cost for each seat.

Worked example

Suppose an office of 4,600 sq ft with 50 seats, used for 5 years. The figures below are invented for the example and are not market prices.

• Monthly: rent 1,000 units, CAM 200, parking 50, utilities 150, other 100.
• One-time: fit-out 30,000 units, furniture and IT 18,000.
• Security deposit 6,000 units. Peak attendance 80%.

The total occupancy cost is 2,300 units a month, or 1,38,000 units over the 5 years: 46 units for each seat and 36.8 units for each person served. The deposit of 6,000 units is shown separately and is not part of the total.

With a 10% a year interest rate entered, the one-time costs become a level payment of 1,019.86 units a month, the total rises to 2,519.86, the cost for each seat to 50.4 and the cost for each person served to 40.32. The deposit could have earned about 50 units a month, shown as a note and not added.

How occupiers use it

Rent alone is a poor way to compare offices. A building with a lower rent may carry higher maintenance or parking charges, or need a bigger fit-out because it is handed over bare. Putting every option on the same total monthly cost, for each seat, makes the comparison fair. The cost for each person served adds the effect of hybrid working: if fewer seats serve the same team, the office can be smaller, and the seat capacity calculator shows how many fit.

When a professional must replace it

Use the calculator to compare options and to understand what each seat costs. Before you commit, have the lease reviewed by a lease advisor or property lawyer, have the fit-out priced by a quantity surveyor against drawings, and have the tax and accounting treatment of the rent, deposit and one-time costs confirmed by your chartered accountant.