Explicit cost

An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials,[1] as opposed to implicit costs, where no actual payment is made.

[2] It is possible still to underestimate these costs, however: for example, pension contributions and other "perks" must be taken into account when considering the cost of labour.

[2] Explicit costs are taken into account along with implicit ones when considering economic profit.

Accounting profit only takes explicit costs into account.

[1]