What does discretionary mean in business?

In business, discretionary refers to an expense or cost that a business can survive without, if needed. These are often defined as nonessential spending. Even if all discretionary spending stops, a business should be able to still maintain itself.

There are many expenses that a business cannot survive without, such as payroll expenses, inventory, rent, and other important things. In contrast, items such as Friday lunches offered by the company, snacks in a break room, or team retreats are discretionary expenses and are not necessary for the survival of a company.