When I first began handling my company's finances,
I was a bit confused with this query: Is rent a direct expense?Although it appeared simple, I found out after doing further research and speaking with an accountant that rent is usually considered as an indirect expense rather than a direct one.
Is Rent a Direct or Indirect Expense?
Costs such as labour or raw materials used on the factory floor are examples of direct expenses, which are directly related to the creation of goods or services. However, rent typically applies to showrooms, storage, or office space, supporting rather than production related tasks. For this reason, rent is usually included in accounting under indirect expenses.
But there is one exception. Since the rent is directly related to manufacturing the product, it might be considered a direct expense if you are renting a space solely for manufacturing, such as a factory used only for production.
Hope this helps!
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Is Rent a Direct Expense?
Payel90
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8 months
2025-05-23T09:09:00+00:00 2025-05-23T09:09:01+00:00Comment
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