Expense Category
Equipment

What expense category is clothing bought for employees?

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There is no definitive answer to this question, as the correct expense category for clothing bought for employees will depend on the specific business and the type of clothing being purchased. However, some common expense categories for clothing bought for employees include:

1. Cost of Goods Sold

If the clothing being purchased is for employees to wear as part of their job (e.g. uniforms), then it would typically be classified as a cost of goods sold. This is because the clothing is considered to be part of the product or service that the business is selling, and so it is directly related to the revenue of the business.

2. Advertising and Promotional Expenses

If the clothing being purchased is for employees to wear as part of a promotional or advertising campaign (e.g. branded t-shirts or hats), then it would typically be classified as an advertising or promotional expense. This is because the clothing is being used to promote the business, and so it is directly related to the business's marketing efforts.

3. Miscellaneous Expenses

If the clothing being purchased is not directly related to the business's revenue or marketing efforts (e.g. casual clothes for employees to wear in the office), then it would typically be classified as a miscellaneous expense. This is because the clothing is not directly related to the business's core operations, and so it does not fall into one of the other expense categories.

Ultimately, the correct expense category for clothing bought for employees will depend on the specific business and the type of clothing being purchased. However, the expense categories listed above are some of the most common ones used for this type of purchase.

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As we scale we need tools that are built to scale with us - we need to see expenses real time, we need to see duplicate spend. These types of insights are important to the health of our business.
Steve Padis, SVP Finance & Strategy, Barry's
The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.

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