Expense Reimbursement Calculator

Commercial leases pass operating expenses to tenants on a pro-rata basis, often with an expense stop (modified gross) or full pass-through (triple-net). The reimbursement calculation involves pro-rata share of total opex, the admin fee landlords add as overhead recovery, and gross-up provisions that adjust for partial building occupancy. This calculator structures the full reimbursement billing.

Total reimbursable opex

Total building SF

Tenant occupied SF

Building occupancy %

Expense stop ($/SF)

Modified gross only

Admin fee %

Mark-up on opex

Tenant reimbursement / yr

$43,700

Opex / SF

$4.00

Pro-rata share %

15.83%

Base reimbursement

$38,000

Admin fee

$5,700

Grossed-up amount

$47,500

If lease has gross-up clause

How the math works

Tenant reimbursement = (opex/SF − expense stop) × tenant SF + admin fee. Triple-net (NNN) leases pass 100% of opex through; modified gross uses an expense stop that the landlord covers up to and the tenant pays excess over.

Gross-up clauses adjust variable expenses (utilities, janitorial) as if the building were 95-100% occupied so a half-empty building's per-SF cost is fairly allocated to the few tenants paying.

How to Use

Enter total reimbursable opex, total building SF, and the tenant's leased SF.
Set the expense stop ($/SF the landlord eats — 0 for NNN).
Set the admin fee % (typically 10-15%).
Read the annual reimbursement billable to the tenant and the grossed-up amount if a gross-up clause applies.

Frequently Asked Questions

What's an expense stop?

Landlord covers opex up to a $/SF threshold; tenant pays the excess. Common in modified gross office leases — landlord absorbs the first ~$8-12/SF, tenant pays everything above.

Why a gross-up clause?

Variable opex (utilities, janitorial) doesn't scale linearly when a building is half empty. Gross-up adjusts as if the building were 95% occupied so the few tenants paying don't subsidize empty space.

Can tenants audit reimbursements?

Yes — most leases give tenants 6-12 months after the year-end statement to audit landlord books with a CPA. Errors over 3-5% trigger landlord paying audit cost.