Is coffee an expense or office supply?

Is coffee an office supply?
To ensure profitability, you need to track your business expenses and spending on office supplies. The question is, which category should items like tea and coffee be tracked in?

In this article, we outline how to add items like tea and coffee to your business accounts. We also share our full range of beverages and break-room supplies to keep your team constantly fuelled.

Office expense vs office supply

While often used interchangeably, office expenses and supplies refer to different things. We’ve explained the main distinctions to help you keep accurate records:

What is an office expense?

Office expenses, also sometimes called office operating expenses, refer to the cost of owning or renting an office. This includes things like cleaning services, office utilities, website hosting services, computers, and landlines or mobile phones. Usually, employees cannot use these items for personal use.

Tracking office expenses is vital for the following:

Understanding tax liabilities.
Tracking the business's profitability.
Calculating operating costs

What are office supplies?

Office supplies include any items required to run your office effectively, including stationery, office furniture, printers, technological resources, cleaning products, health supplies, product packaging supplies, and consumables, such as tea and coffee.

Due to their lower value compared to office expenses, you cannot claim depreciation or deductions of office supplies when filing your taxes.

Is coffee an office expense or an office supply?

Since tea and coffee are so widely consumed, they have become staples in the office environment. Most businesses supply tea and coffee for their employees, along with sugar, hot chocolate, and milk. These items are known as office consumables, which are a type of office supply.

Are tea and coffee tax deductible?

Office supplies like tea and coffee are a type of fringe benefit and are therefore liable for Fringe Benefit Tax (FBT). All employers and businesses who provide fringe benefits must file regular FBT returns with Inland Revenue. Food and drink expenses are typically classified as entertainment and are deductible at either 50% or 100%.

If you provide tea, coffee, morning tea, or afternoon tea for all employees on the business premises, they are fully deductible. This applies when these light refreshments are available to all staff and are available at all times. Please note that this changes when the refreshments are provided at a party, reception, celebration meal, or similar social function.

For more information on Entertainment Expenses, see the Inland Revenue website.

Order tea and coffee online

Here at Primepac, we make ordering your office supplies easy. We stock thousands of specialty office, warehouse, and workplace supplies via our website so you can easily make bulk orders as and when you need them.

To order what you need, simply browse the range on our website and add them to your cart. When you have found everything you need, click the cart icon in the top right-hand corner of the screen and click ‘Secure Checkout’. Follow the prompts to complete your order and we’ll send you a confirmation email when the order is shipped.

In addition to our packaging supplies, e-commerce supplies, and other office supplies, we also stock a range of drinks to ensure you always have enough on hand, including: