What expense category does parking come under?

Wondering how to categorize parking expenses in your financial records? It's a common question for businesses of all sizes. Let's break down where parking fits in your expense categories to keep your accounting on track.

Classifying parking expenses

Categorizing parking expenses depends on the context. Here are the main ways to classify parking costs:

• Travel expenses: If you're parking during a business trip—like at an airport or hotel—these fees typically fall under travel expenses.
• Transportation expenses: Parking fees that are part of your regular business operations, such as parking at the office or warehouse, usually count as transportation expenses.
• Operating expenses: When parking is a regular part of doing business—like parking for company vehicles—it can be considered an operating expense.

Examples of parking expenses

To make it clearer, here are some examples of parking expenses and how you may categorize them.

• Airport parking during a business trip: If you leave your car at the airport while traveling for work, this parking fee is a travel expense.
• Parking at client meetings: Fees paid when you park to meet a client are transportation expenses.
• Parking for company vehicles: Regular parking costs for company-owned cars or trucks are operating expenses.
• Monthly parking at the office: If you pay for employee parking at your office, that's typically a transportation expense.

Suppose your business pays $200 per month for parking spaces for company vehicles. This would be categorized as an operating expense.

Tax implications of parking expenses

Next, let’ talk about a few expenses you need to know , as this can help you save money.

• Deductible parking expenses: Parking fees that are directly related to business activities—like client meetings or business trips—are usually tax-deductible.
• Non-deductible expenses: Parking costs related to personal use, such as commuting to your regular workplace, aren't deductible.
• Record-keeping: Keep detailed records, like receipts and logs, to support your deductions in case of an audit.
• Proper categorization: Correctly classifying parking expenses ensures you maximize your tax benefits and maintain financial clarity.

Let Ramp automate your expense process

Keeping track of parking expenses doesn't have to be a hassle. Ramp's expense management software simplifies categorization, tracking, and reporting. With automation and real-time visibility, you can manage parking and other expenses effortlessly—saving you time and ensuring accuracy.