Operating expenses refer to the costs incurred by a business or organization while carrying out its regular operations. These may include items such as rent, utilities, salaries and wages for employees, office supplies, marketing and advertising, insurance premiums, taxes, and other miscellaneous expenses related to running the day-to-day activities of a business. Operating expenses are important because they help determine the profitability of an organization by subtracting them from revenue to calculate net income or loss.