OpEx vs CapEx

OpEx is the day to day cost of running a business. CapEx is one-off spending on owned assets. A printer lease is generally OpEx.

Operating expenses (OpEx) are the day to day costs of running a business, such as wages, rent, utilities, and service subscriptions, that are generally deductible in the tax year they are incurred.

Capital expenses (CapEx) are one-off purchases of assets a business owns and depreciates over time, such as an outright printer purchase.

An operating lease for a printer or copier is generally structured as an OpEx line item, because the business pays for the use of the device rather than acquiring ownership.

This distinction matters for budgeting, since OpEx is easier to approve through monthly operating budgets, and for tax, since operating expenses are generally deductible in the year incurred while owned assets follow a depreciation schedule.

Confirm the appropriate treatment for your business with your accountant.