What expense category is Office Cleaning?

Maintaining a clean and organized office environment is crucial for employee productivity and creating a positive impression for clients and visitors. Office cleaning expenses are a regular part of running a business, and it's important to understand how to categorize them properly.

Office Cleaning Expense Category

Office cleaning expenses typically fall under the category of operating expenses or general and administrative expenses. These are the ongoing costs a business incurs to run its daily operations and maintain its facilities.   

Some Considerations While Classifying Office Cleaning Expenses

• In-house vs. Outsourced: If you have employees dedicated to cleaning, their wages and the cost of cleaning supplies would be classified as operating expenses. If you hire an external cleaning service, the fees paid to the service would also be classified as operating expenses.
• Scope of Services: The specific classification can depend on the scope of cleaning services. General cleaning is typically an operating expense, while specialized cleaning, such as post-construction cleanup, might be capitalized if it's part of a larger improvement project.
• Allocation: If your business has multiple departments or locations, you may need to allocate office cleaning expenses proportionally based on factors like square footage or the number of employees in each area.

Examples of Office Cleaning Expenses

• Wages paid to cleaning staff
• Fees paid to professional cleaning services
• Cost of cleaning supplies (e.g., disinfectants, trash bags, paper towels)
• Cost of cleaning equipment (e.g., vacuums, mops)

Tax Implications of Office Cleaning Expenses

Office cleaning expenses are generally tax-deductible business expenses. This means you can deduct these costs from your business income to reduce your taxable profit. However, it's important to keep accurate records of these expenses and ensure they are ordinary and necessary for your business.

According to IRS Publication 535, expenses for maintenance, repairs, and upkeep of buildings are deductible expenses. This would generally include office cleaning.   

However, if the cleaning is part of a larger improvement project, those costs may need to be capitalized. 

How Fyle Can Help

Fyle's AI-powered expense management platform can help businesses accurately categorize and track their office cleaning expenses. Fyle's AI can automatically extract data from receipts and invoices, ensuring accurate record-keeping and compliance with tax regulations.  This saves businesses time and reduces the risk of errors, making tax preparation easier and more efficient.