To be out of pocket is to have expended personal resources, often unexpectedly or unfairly, at the end of some enterprise. In the United States, out-of-pocket expenses for such things as charity, medical bills, and education may be deductions on US income taxes, according to IRS regulations. Organizations often reimburse out-of-pocket expenses incurred on their behalf, especially expenses incurred by employees on their employers' behalf. The services rendered and other in-kind expenses are not considered out-of-pocket expenses the same goes for depreciation of capital goods or depletion. Car insurance, oil changes, and interest are not, since the outlay of cash covers expenses accrued over a longer period of time. Look up out-of-pocket in Wiktionary, the free dictionary.Īn out-of-pocket expense (or out-of-pocket cost, OOP) is the direct payment of money that may or may not be later reimbursed from a third-party source.įor example, when operating a vehicle, gasoline, parking fees and tolls are considered out-of-pocket expenses for a trip.
