Tax Expense Categories are the different divisions by which companies can itemize and categorize their tax deductions. Companies can better understand their overall tax liability when each category of tax expense is broken down into specific subcategories. For instance, a company may classify the wages paid to employees as an ‘Employee Costs’ expense category. This expense would then be broken down further into individual components such as salaries, bonuses, and employee benefits. By breaking expenses down into these Tax Expense Categories, companies have a clearer picture of exactly where their money is going and how much they owe in taxes.