What expense category does a toll come under?

Wondering where toll expenses fit into your business budget? Tolls are a common cost for many companies, especially those that rely on road travel. Let's explore how to categorize tolls in your expense reports.

Classifying toll expenses

Categorizing toll expenses correctly helps keep your financial records accurate. Tolls typically fall under transportation or travel expenses. Here are key ways to classify them:

• Transportation expenses: Use this category if tolls are incurred during regular business operations, like deliveries or service calls.
• Travel expenses: If tolls are part of a business trip, such as attending conferences or meeting clients out of town, they can be classified under travel expenses.
• Vehicle expenses: Sometimes, tolls are grouped with other vehicle-related costs like fuel and maintenance.

Examples of toll expenses

Now here are some specific examples of what these kinds of costs can look like so you know know what we’re talking about:

• Delivery routes: Paying tolls while delivering goods to customers across toll roads or bridges.
• Client visits: Tolls paid when traveling to meet clients or partners in different locations.
• Employee commutes: Reimbursing employees for tolls during business-related travel.
• Service calls: Field technicians paying tolls to reach job sites.

For instance, if your sales team attends a conference in another city and pays $15 in tolls each way, that $30 would be considered a toll expense.

Tax implications of toll expenses

Toll expenses can often be deducted on your business taxes, but it's important to handle them correctly. Key tax considerations include:

• Deductible expenses: Tolls paid during business travel are typically tax-deductible.
• Proper classification: Ensure tolls are categorized correctly in your accounting software to simplify tax preparation.
• Personal vs. business use: Only tolls incurred for business purposes are deductible; personal travel tolls are not.

Recording toll expenses accurately helps maximize deductions and keeps you compliant with tax regulations. Don’t forget to keep receipts or electronic records of toll payments to support your deductions.

Let Ramp automate your expense process

Managing toll expenses doesn't have to be a hassle. Ramp automates the categorization and tracking of all your expenses, including tolls. With real-time insights and seamless integration, Ramp helps you stay on top of your spending and simplifies your expense management process.

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