27 Monthly Business Expenses to Budget For

Before starting a business, it’s important to get a clear picture of the expenses you’ll face. It’s just as important to review those expenses regularly and manage them well.

Below are 27 monthly business expenses to plan for.

1. Rent, Lease, and Mortgage Payments

Pay rent, lease, and mortgage bills on time. Late payments can hurt your credit or your relationship with your landlord.

Rent, lease payments, and the interest portion of a business mortgage are deductible business expenses. The IRS requires only that a cost be ordinary and necessary for your trade or business.

If you work from home, you may also qualify for the home office deduction. Under the simplified method, you can deduct $5 per square foot of space used regularly and exclusively for business, up to 300 square feet — a maximum of $1,500 a year.

Build a small buffer into your budget so these payments go out a few days early. That buffer gives you room to breathe if cash gets tight.

2. Loan Payments and Interest

Many businesses start out with debt.

Pay loan and lease payments on time. Late payments can trigger penalties and hurt your credit rating.

The interest you pay on business loans is also a deductible expense.

3. Salaries

A strong payroll fund is essential.

Miss payroll even once, and your team will start to question the stability of the business. That doubt can lead to high employee turnover.

4. Payroll Taxes

Budget for payroll taxes on top of payroll itself. Falling behind causes problems fast, and once you’re behind, it’s hard to catch up.

Think of the taxes you withhold from employee paychecks as someone else’s money you’re holding, not your own. Setting a strict policy against touching it removes the temptation.

There’s a real reason to take this seriously. The IRS can hold owners, officers, or anyone with signing authority personally liable for 100% of unpaid payroll withholding — a penalty that survives even if the business closes.

5. Employee Benefits

Hiring costs more than just salary. Taxes, benefits, and other costs belong in your budget too.

Make sure benefit premiums are included and paid. The last thing you want is an employee’s claim denied because a premium went unpaid.

6. Phones

Budget for monthly phone bills, whether you use cell phones, landlines, or both. A small workforce needs fewer lines than a large one, so look for a cost-effective plan.

Company cell phones and data plans add up quickly once you have several employees. The cost is deductible, which helps offset it.

7. Internet Access

High-speed internet is a must for most businesses, especially ones that depend heavily on it. A larger workforce needs enough bandwidth to keep everyone working at full speed.

Internet access is a deductible business expense worth claiming.

8. Electricity

Electricity is an expense you’ll need to budget for, and the size of your business affects how much you’ll pay. A warehouse uses far more power than a small office.

The energy you use to run your business qualifies as a deduction.

9. Natural Gas

If your business uses natural gas, budget for that expense separately. It’s another cost you can deduct.

10. Water Usage and Sewer Expenses

Water and sewer bills may be small at home, but they can add up fast for a larger business. These costs are deductible as well.

11. Trash Pickup

Trash pickup and waste management are easy to overlook. A factory will need to budget for this directly, while a small office may find it’s already folded into property taxes.

12. Municipal Taxes

Depending on how your business is structured, you may owe municipal taxes. Like other government taxes, don’t let this one fall behind.

13. Property Taxes

If your business owns its property, budget for property taxes each year.

If you lease or rent, get it in writing who pays the property tax — you or the landlord. You don’t want a surprise bill.

14. Office Supplies

Office supplies seem small, but the cost adds up. A few dollars here and there can turn into a few hundred over time.

15. Cleaning Supplies

Cleaning supplies get overlooked the same way office supplies do. The cost is easy to miss and can grow, especially for larger businesses.

16. Marketing and Advertising

Marketing and advertising are an ongoing cost of staying in business. Track your results, and put more budget behind what actually works.

17. Website Hosting and Maintenance

Hosting costs range from a few dollars a month to thousands, depending on your needs. A business that depends heavily on its website may need a high-end plan or a dedicated server, plus a budget for ongoing maintenance.

18. Vehicle Expenses

If your company owns vehicles, budget for fuel, maintenance, repairs, and insurance. Plan how long you’ll keep each vehicle and what it will cost to replace.

It’s also worth comparing the cost of leasing versus buying.

19. Travel Expenses

When you use a personal vehicle for business, the standard mileage rate is the simplest way to calculate the deduction. As of July 1, 2026, the IRS rate is 76 cents per mile, up from 72.5 cents at the start of the year.

Document travel expenses like flights, trains, buses, and cabs too, so you can claim them as deductions.

20. Business Equipment – Leases & Loans

Whether you lease or buy equipment, budget for the payments so they’re covered on time.

21. Bookkeeping Fees

Outsourcing your accounting means budgeting for bookkeeper or accountant fees. These can be significant, so plan for them.

Alternatively, you can hire an employee to keep your records and hand them off to an accountant. In that case, the cost falls under salaries instead.

22. Professional Fees

Every business needs professionals at some point — lawyers, consultants, accountants, industry specialists. Fees can run from a few hundred dollars to several thousand, and a good professional is usually worth the cost when they solve your problem.

23. Insurance

Insurance is a core part of running a business. Operating without enough coverage, or the wrong coverage, can be costly.

Consider property, casualty, liability, interruption, disability, and malpractice insurance depending on your business. Talk to a competent insurance agent to find the right coverage for your operation.

24. Petty Cash

Keep a petty cash fund for small expenses you wouldn’t put on a credit card — office supplies, coffee for a meeting, small employee costs.

Document every receipt so you can claim these expenses at tax time.

25. Shipping Costs

If shipping is a big part of your business, build it into your budget. Shop around for volume discounts, and balance speed against cost to get products to customers on time.

26. Food and Entertainment

Business meals with clients or during work travel are generally 50% deductible. Document who attended and the business purpose, and keep your receipts in case of an IRS audit.

Entertainment is different. Costs like a game, a round of golf, or a concert with a client generally aren’t deductible, even with a clear business purpose behind them.

If a meal happens alongside an entertainment event, keep the cost of the food separate and documented on its own. That’s what preserves the 50% meal deduction.

If you regularly take clients out, build the meal portion into your monthly budget — and treat entertainment costs as money you generally won’t get back at tax time.

27. Miscellaneous Cost

You’ll also have miscellaneous costs that don’t fit neatly into the categories above. If one becomes a regular, ongoing cost, add it to your budget.

You can break this list down further to fit your business. Not every category applies to every business, and some businesses will have expenses not listed here.

Related Expenditures To Keep in Mind

Sales Tax

Sales tax is money you collect on behalf of the government, not revenue. Keep it separate from your income so the two never get mixed up.

Capital Expenses

Capital expenses cover funds that improve your business — expansions, major equipment purchases, or vehicles. They don’t count as monthly expenses on their own, but if you finance them with a loan, the loan payment becomes a manageable monthly cost.

Inventory

If you sell products, budget for inventory. Without it, you can’t make sales.

Keep in mind that money tied up in inventory isn’t available for other expenses until it sells.

2 Tips For Dealing With Monthly Business Expenses

1. Review Your Expenses

Review your monthly expenses regularly so costs don’t slip by unnoticed.

Imagine paying $39 a month for a service you no longer use. Over five years, that’s $2,340 spent on nothing.

2. Look for Areas To Cut Costs

Look for places to cut costs without sacrificing quality or productivity.

Keeping costs down helps your business stay in the black — and stay open — when the economy turns weak.

Budgeting Tips

Paying operating expenses is one of the most common financial challenges small businesses face. In the Federal Reserve’s 2025 Report on Employer Firms, 56% of small employer firms cited it as a challenge.

Budgeting your operating funds is the best defense. With this many monthly expenses, it’s easy to overspend.

Imagine overspending by a few thousand dollars a month. In just a few months, that adds up to debt that’s hard to recover from.

At the same time, don’t starve your business of investment. Skipping investment and building your bank account too cautiously can mean missing real opportunities.

A budget lets you keep a close eye on where your money is going.

Key Points and Facts About Monthly Business Bills and Expenses

Most monthly business costs — rent, utilities, phone, loan interest — qualify as deductions if they’re ordinary and necessary for your business.
Business meals are 50% deductible, but entertainment (games, golf, concerts) generally isn’t deductible.
Payroll withholding is trust fund money — the IRS can hold owners and officers personally liable for 100% of unpaid amounts, even after a business closes.
The IRS standard mileage rate is 76 cents per mile as of July 1, 2026.
The simplified home office deduction is $5 per square foot, up to 300 square feet — a maximum of $1,500 a year.
The Federal Reserve’s 2025 Report on Employer Firms found 56% of small employer firms named paying operating expenses as a top financial challenge.

Action Steps for Managing Monthly Business Expenses

Build a Payroll Cushion

Keep enough in reserve to cover payroll and payroll taxes even in a slow month.
Never use withheld payroll taxes to cover other bills.

Separate Meals From Entertainment

Document client meals separately from any entertainment activity.
Note who attended and the business purpose, and keep the receipts.

Track Vehicle and Travel Costs

Log business mileage as you go, using the current IRS rate.
Keep receipts for flights, trains, and other travel.

Review Recurring Charges Monthly

Check subscriptions and services for ones you no longer use.
Cancel anything that isn’t earning its keep.

Confirm Your Deduction Methods

Decide whether the simplified or regular home office method works better for you.
Revisit that choice each year — you can switch methods annually.

Checklist for Managing Monthly Business Expenses

Rent and Loan Payments
- Set up autopay a few days ahead of the due date.
Payroll and Payroll Taxes
- Confirm payroll tax deposits are scheduled and funded.
Insurance Coverage
- Review your property, liability, and any specialty coverage you need.
Home Office Deduction
- Measure your space, and choose the simplified or regular method.
Mileage Log
- Start tracking business miles at the current IRS rate.
Petty Cash Records
- Keep a receipt for every petty cash expense.
Monthly Expense Review
- Put a recurring reminder on your calendar to review all expenses.

FAQ: Monthly Business Expenses

Are business meals fully deductible?

No. Business meals are generally 50% deductible when you document who attended and the business purpose.

Is taking a client to a game or a round of golf deductible?

Generally, no. Entertainment expenses like these usually aren’t deductible, even with a clear business reason for the outing.

What is the current IRS mileage rate?

As of July 1, 2026, the rate is 76 cents per mile for business use of a personal vehicle.

What happens if I fall behind on payroll taxes?

The IRS can assess the Trust Fund Recovery Penalty, holding responsible individuals personally liable for 100% of the unpaid amount.

Can I deduct a home office if I run my business from home?

Yes, if the space is used regularly and exclusively for business. The simplified method allows $5 per square foot, up to 300 square feet.

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