What are General and Administrative (G&A) Expenses?

General and administrative (G&A) expenses are the ongoing costs that keep your company running, even when sales fluctuate. They include rent, utilities, insurance, accounting, and administrative salaries, which are the essentials that keep the business operating. Managing them affects your margins, compliance, and how quickly you close the books.

We'll explain what qualifies as G&A, what doesn't, how GST/HST input tax credits work, and how to control costs while staying CRA compliant.

Understanding G&A expenses in Canada

A business expense is deductible if it is reasonable, incurred to earn business income, and properly documented. “Reasonable” means the cost aligns with your business size and industry; for example, a modest phone plan for a solo consultant may be fine, while a $600 plan might not be.

Typical G&A expenses include:

• Office rent and utilities
• Office supplies and company-wide software subscriptions
• Professional fees such as legal and accounting
• Salaries and benefits for administrative staff and management not directly tied to sales or production
• Insurance premiums related to operations
• Business licences and professional dues (excluding recreation or club fees)
  

CRA confirms that most ordinary business expenses are deductible if they meet the “reasonable and incurred to earn income” test. Club or recreational dues are specifically excluded.

In short, if an expense keeps your business running but doesn’t directly generate revenue, it likely falls under G&A.

What is not G&A?

Just as important as knowing what goes into G&A is knowing what doesn’t.

• COGS (Cost of Goods Sold): Direct materials, direct labour, and shipping related to producing goods or services.
• Selling expenses: Advertising, sales commissions, sponsorships, and sales travel. These belong in Selling, not G&A.
• Capital assets: Computers, machinery, and furniture are capitalized and depreciated using Capital Cost Allowance (CCA) instead of being expensed in the same year.

G&A vs. SG&A

SG&A (Selling, General and Administrative) includes all operating costs that aren’t part of cost of goods sold. Many small businesses report a single SG&A line, but separating Selling from G&A gives you more control and clarity.

Doing so helps you:

• Track which costs scale with revenue and which do not
• Hold departments accountable for their budgets
• Spot efficiency gaps before quarter-end

Keeping G&A separate helps you see which costs scale with growth and which stay fixed, making budgets and forecasts more accurate.

GST/HST registration and input tax credits

When your business must register for GST/HST

The small-supplier threshold for most businesses is $30,000 CAD in taxable sales (before expenses) over a single calendar quarter or over the last four consecutive quarters.

• If you exceed $30,000 in one quarter, you cease to be a small supplier immediately, and your effective date of registration is no later than the day of that supply.
• If you exceed $30,000 cumulatively over four quarters, your effective date is the day after you cease being a small supplier.
• You must apply for registration within 29 days of that effective date.
• Public service bodies such as charities and nonprofits have a higher $50,000 threshold.

For more detail, see the official CRA guide on when to register for GST/HST.

If you’re ready to register, follow our step-by-step breakdown on how to register for a GST/HST number in Canada.

Claiming input tax credits (ITCs)

Input tax credits (ITCs) let your business recover the GST/HST paid on eligible purchases. Once registered, you can deduct these credits from the amount you owe the CRA.

To stay organized, you'll need a clear system for categorizing expenses. Accountants call this the chart of accounts: a list of categories you use in your books to record every transaction. When set up properly, it makes your financial reports and tax filings easier to manage.

For small and medium-sized businesses, you only need three broad categories to stay organized:

1. General and Administrative (G&A)

These are your everyday operating costs that keep the business running. Think of rent, utilities, office supplies, accounting or legal services, and salaries for admin and finance staff. They are the backbone of your operations but do not directly produce sales.

2. Selling and Marketing

This category covers anything tied to generating revenue. That includes advertising, promotional costs, sales commissions, and travel for client work. Keeping these separate from G&A helps you see how much it costs to bring in new business versus how much it costs to run the business.

3. Capital Assets

Some purchases, such as computers, furniture, or machinery, are not day-to-day expenses. They are long-term investments that lose value gradually over time. These go on your balance sheet instead of your expense list and are written off through Capital Cost Allowance (CCA) under CRA rules.

Keeping these three sections clear helps you manage overhead, forecast more accurately, and make decisions about spending. When everything falls into the right category, your reports show a true picture of where money is going and where efficiencies can be found.

How to put this in place quickly

Once you understand how your expenses should be grouped, setting up your categories is straightforward. You can do it in under an hour.

Start by cleaning up your accounting software. The goal is clarity, not complexity.

1. Rename categories so they are clear and self-explanatory.
2. Remove duplicates so there is only one logical place to record each expense.
3. Add short descriptions for each main category. For example, “Software: companywide tools only. Sales tools go to Selling.”
4. Assign default categories to common vendors to reduce miscoded entries and speed up reconciliation.
   

If you already use QuickBooks or Xero, Venn connects directly to both with two-way accounting sync. When you pay bills or capture receipts through Venn, transactions automatically post to your accounting system in the right category, removing manual work and improving month-end accuracy.

This simple structure is enough to make your financial data easier to read, your G&A analysis cleaner, and your close process faster.

Documentation: what CRA expects

Keep invoices and vouchers that support the business purpose, vendor, date, and amounts. Digital copies are acceptable when they are legible and accessible. The Government of Canada’s business expense pages outline documentation expectations and common categories.

Common expense edge cases for Canadian businesses

Companywide software: Tools used across the company, such as HRIS or finance platforms, are usually G&A. Sales-specific tools belong in Selling.

Meals and events: Prospect-facing meals are Selling. Internal team meals and operations offsites are typically G&A. Observe CRA deductibility limits and keep itemized receipts.

Home office and remote work: If you use part of your home as your main place of business or regularly meet clients there, you can deduct a reasonable portion of home expenses. CRA provides the formula for calculating the deductible portion.

Laptops and equipment: Treat these as capital assets and claim CCA over time instead of expensing them. CRA outlines the process for calculating depreciation and capital classes.

Practical ways to keep G&A lean

1. Standardize vendors and terms

Consolidate overlapping tools and negotiate annual terms only where usage is stable. Avoid prepaying for seats that may change.

2. Set guardrails on spend

Issue corporate cards with category controls, per-user or per-team limits, and real-time tracking. Stopping out-of-policy spend before it hits the ledger is more efficient than cleaning it up later.

3. Route payments intelligently

Use low-cost domestic rails for routine vendor payouts and payroll. Pay US vendors by ACH from a true USD account to avoid cross-border fees and double conversion. Reserve wires for urgent or unusual corridors. Here's a closer look at how ACH and EFT payments compare.

4. Automate the close‍

Use receipt capture, coding rules, and approvals so transactions land in the right accounts the first time. Sync with your general ledger to cut back-and-forth during month-end.

Track a small set of KPIs

• G&A as a percentage of revenue
• G&A per full-time equivalent
• Professional fees by project or matter
• Companywide software spend per FTE
• Review monthly against budget and highlight variances early.

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How Venn simplifies G&A management

Venn is a business banking platform for Canadian companies. It brings invoicing, payments, multi-currency accounts, and FX transfers into one place, which helps you control SG&A while keeping operations smooth.

• Invoicing and receivables: Create invoices and reconcile payments faster.
• Payments and payables: Pay vendors by low-cost domestic transfers and send global transfers online with clear FX.
• Multi-currency accounts and FX transfers: Hold CAD, USD, GBP, and EUR, and pay from the right currency to reduce FX losses hitting G&A.

G&A is easier to manage when the tools actually talk to each other. Venn connects your accounts, cards, and books in real time so you can see every dollar that moves, without spreadsheets or manual work.

You’ve built the business. Now build the systems to match. Start with Venn today! 

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Frequently asked questions (FAQ)

How much G&A is normal for a small business?

It depends on your industry. For many service-based businesses, G&A often falls between 10% and 25% of total expenses. What matters most is tracking the trend over time. If overhead grows faster than revenue, review spend areas such as software, subscriptions, and professional fees.

How often should G&A categories be reviewed?

Review your categories at least once a year, ideally before your fiscal year-end or when you update your budget. Adjust them when your operations change, such as adding new teams, currencies, or markets.

Can I split an expense between G&A and another category?

Yes. If an expense supports more than one function, such as software used by both operations and sales, you can allocate it proportionally. The key is to document your reasoning and apply it consistently each year.

What happens if I misclassify G&A expenses?

Incorrectly classifying expenses can distort your reporting and budgets. While CRA rarely penalizes honest mistakes, accuracy matters for forecasting, internal planning, and audit readiness.

How can I lower G&A without cutting people or essential tools?

Start by automating manual work. Reconcile transactions automatically, simplify approvals, and remove duplicate tools. Improving workflow efficiency usually saves more than line-item cuts.

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_{This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Venn Software Inc or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.}