10 common examples of non-operating expenses

As you categorize your business expenses, you’ll probably find a number of costs that don’t directly relate to your business’s day-to-day operations. These are known as non-operating expenses.

Below, we take a closer look at what non-operating business expenses are and how they differ from operating expenses (OpEx). Plus, we’ll highlight common examples you may encounter.

What are non-operating business expenses?

Non-operating expenses are costs your business incurs that are unrelated to its core activities, such as production, sales, or service delivery. These might include non-operating costs like interest charges, inventory write-downs, or costs associated with restructuring your business.

These appear alongside non-operating income, such as gains from investments or asset sales, on your income statement—both offering insight into financial activity outside of your main operations.

Operating vs. non-operating expenses

What’s the difference between operating vs. non-operating expenses?

Operating expenses (OpEx) are the costs required to sustain your business’s day-to-day operations. These expenses either directly or indirectly support the production and sale of your company’s products or services. Common examples include rent, utilities, employee salaries, and marketing expenses.

Note that your company’s cost of goods sold (COGS) is a separate line item in most financial statements and is not included in OpEx. While OpEx appears on the income statement, liabilities related to non-operating expenses—like long-term debt—are recorded on the balance sheet, giving stakeholders a fuller picture of financial health. Read more on what qualifies as COGS vs. OpEx.

Non-operating expenses, on the other hand, are unrelated to core operations and are usually reported separately to provide a clearer picture of your business’s operating performance.

Accurately classifying these expenses is essential for financial reporting and forecasting—but it can get messy fast if you're managing them manually. That’s where Ramp’s expense management software can provide critical value. With smart categorization rules and automated expense tracking, Ramp helps finance teams stay organized and audit-ready—without the spreadsheet sprawl.

Examples of non-operating expenses

Some types of non-operating costs can be one-time expenses, and others might happen on some cadence, depending on your business. So, what are examples of non-operating expenses? Here are ten types of non-operating expenses your business may incur.

1. Inventory write-offs

If your inventory becomes unsalable because it’s lost, stolen, damaged, spoiled, or outdated, you can write off or write down the value of that product or materials. When that happens, you record a loss for your business, which is treated as a non-operating expense. The good news is that this also allows you to claim a tax deduction for the value of the lost inventory.

2. Lawsuit settlements

If your business is involved in a lawsuit and you need to pay a settlement to the plaintiff, that settlement is a non-operating expense. Legal fees, like those charged by counsel, are still regular operating expenses.

3. Interest expenses

Does your business carry debt on a mortgage, auto loan, business loan, credit card, or something else? Because interest payments don’t contribute to the core functioning of your business, any interest you pay on this debt is a non-operating expense.

4. Restructuring costs

Costs you incur as a part of corporate or organizational restructuring are non-operating expenses. Examples of restructuring expenses could be acquisition costs or severance pay for workers who are laid off.

5. Relocation costs

If you need to relocate your business from one physical location or building to another, the costs you incur during the process are non-operating expenses. This includes obvious expenses like movers and transporting your property. It can also include less obvious expenses like relocation stipends for your employees or recruitment costs needed to bring on new hires.

6. Losses on investments

When businesses have extra funds, they’ll sometimes put them to work by investing in other ventures or financial instruments instead of their core business. If these investments result in a loss, those losses should be tracked as a non-operating expense.

7. Currency fluctuations

Foreign exchange rates are constantly fluctuating. If your business holds foreign currency—for example, because you operate in multiple countries or do business internationally—and the currency exchange rate decreases, it could result in a non-operating loss for your business.

8. Disaster loss and recovery

If you experience a natural disaster that results in a loss for your business, that loss and any costs associated with recovery are recorded as non-operating expenses. Common examples include damage from a hurricane, flood, earthquake, or tornado.

9. Losses from the sale of assets

Businesses often sell assets they no longer need. Examples can include real estate, equipment, intellectual property, or even entire subsidiaries that no longer make sense to your business plan. If these asset sales result in a loss, those losses count as non-operating expenses.

10. Accounting method changes

If you need to make changes to the accounting methods you use, it can result in changes to the recorded value of both liabilities and assets—and might even cause losses where there previously were none. Losses originating in this way are non-operating expenses.

Why are non-operating expenses important for financial analysis?

Non-operating expenses are key to understanding a company’s true operating performance. By separating these costs from day-to-day business operations, financial analysts and stakeholders can better evaluate how efficiently a business is run—without the influence of one-time losses or external financial events.

For example, if a business has strong operating income but a low net income due to high interest payments or asset write-downs, analysts may see the core business as healthy but burdened by outside financial obligations. On the other hand, frequent or growing non-operating costs could signal underlying risks, like poor investment decisions or debt management issues.

In short, tracking and analyzing non-operating costs:

• Helps investors assess operational health separate from financing or extraordinary events
• Supports better forecasting and budgeting by isolating recurring vs. irregular costs
• Provides clarity on where strategic improvements—like debt reduction or asset optimization—can enhance long-term profitability

Understanding this distinction is essential for making informed decisions about business performance, risk, and growth opportunities.

Tracking non-operating costs also improves cash flow forecasting, since many of these expenses—like interest payments or asset sales—impact your business’s liquidity in ways that differ from operational spending.

How do non-operating expenses affect income statements?

Non-operating expenses reduce a company’s net income but do not impact operating income. On the income statement, they’re listed below operating profit (or EBIT) to show their effect separately from core business activities.

Here's how it works:

• Operating income reflects profit from main business operations.
• Non-operating expenses (like interest payments or losses on asset sales) are then subtracted.
• The result is net income, which represents total profit after all expenses—operating and non-operating—are accounted for.

This separation helps investors and analysts evaluate how well a business performs operationally, without the noise of irregular or external costs.

What is depreciation?

Depreciation is the process of spreading the cost of a tangible asset—like equipment, vehicles, or furniture—over its useful life. Instead of deducting the full cost of an asset in the year it's purchased, businesses allocate a portion of that cost as an expense each accounting period. This helps match expenses to the periods in which the asset contributes to revenue.

In most cases, depreciation is considered an operating expense because it relates to assets used in the daily operations of a business. For example, the depreciation of computers used by your staff or machinery used in production is classified as part of your core business expenses—not a non-operating cost.

However, if an asset is unrelated to your primary business functions (such as a vehicle used solely for investment property management), its depreciation may be recorded differently. That’s why it’s important to review how each asset supports—or doesn’t support—your operations when categorizing the expense.

When operating vs. non-operating gets tricky

Some expenses don’t fall neatly into either category without additional context. For example:

• Depreciation is typically an operating expense—but if it relates to non-core assets, it may be reclassified.
• Bad debt expense is usually an operating cost, but significant write-offs from non-operating activities (like unrelated investments) may be viewed differently.
• Rent for your headquarters is OpEx, but rent from investment properties or idle assets may fall under non-operating.

That’s why it’s crucial to apply consistent accounting rules and review your expense classifications regularly—especially when preparing for audits or performance reporting.

Track non-operating expenses easily with Ramp

Manually categorizing expenses can be time-consuming and prone to errors. Ramp’s expense management software automates the process, ensuring all expenses are accurately categorized according to your business logic.

With Ramp, you set up categorization rules once and Ramp does the rest, automatically categorizing transactions according to the established logic. This means the employees submitting expenses, and the accounting team approving them, don’t need to worry about whether an expense is an operating or non-operating cost—it’s already done.

See a demo to learn more about how Ramp can help your business get a better handle on expenses.