What does it mean to 'incur expenses'?

To 'incur expenses' means to bear or take on costs. When an individual or organization incurs expenses, they are in a position where they have to spend money in order to achieve a certain objective or sustain operations. This is a fundamental concept in both personal finance and business management, as it reflects the reality that certain necessary expenditures must be made to function effectively, whether it's for payroll, rent, materials, or other operational needs.

In a legal and employment context, incurring expenses often relates to obligations that arise during the course of employment or as part of business operations. For instance, employers may incur expenses related to employee training, benefits, and other costs necessary to maintain a workforce. Understanding this concept is crucial in areas like financial reporting, budgeting, and compliance with labor laws, as it helps individuals and organizations manage their financial responsibilities accurately.