Extra Expenses are family expenses, which can be negative, meaning you make money, if you have an outstanding bailiff. If someone has super skills, family expenses may be as low as 30%. The average family expenses are at 89% of Surplus. Remember, that if your wife has better skills, AND a higher leadership rating, she has the effect on family expenses. 14th century nobles were outrageous spendthrifts and the wives were often the worst offenders. The Medieval attitude was that, as long as you held the land, there would always be more money to be made off that.
What's left over after family expenses can be used to make war, or engage in whatever else strikes your fancy. Family expense depends on how high the average of your Guile, Management, Leadership and (for males only) Stature values are (modified by applicable skills). The spouse with the higher Leadership stat is used in figuring the expenses, as they are assumed to be the one in charge of handling the family purse. This means that if you have lousy stats, you can often save a bundle by finding a wife with good stats and higher leadership than yours. The amount of expenses doesn't say much, it's the percentage that counts. If nothing else changed, your family expense amount probably went up because you made more money. Look at the percentage of your income that goes to family expense. Average family expense is in the 85% or so range. For regular fiefs the range is 60-95, for megafiefs, it's 85-98% (because these megafiefs were actually collections of several, or dozens, of normal sized fiefs and had extra expenses related to the governance of these areas.) If less than 80% of your income is going to family expenses, you're doing fine. If you own a megafief (e.g. Venice), the range is now 92% to 99.8% (except for Scotland and Ireland, which were slums back then and thus use regular family expense percentages) Megafiefs owned by ANY player have ALL that players Family Expense pegged at Megafief rates (yeah, gonna be rough on d'Anjou, but it wasn't easy to run a Megafief.) These guys did not have a lot of discretionary money to devote to the English/French war. This will cut it by about 60%, but still leave vast amounts of cash sloshing around beyond the borders of France and England.
The number of employees you have only matters if your employee cost more than 50% of total family expense. The system assumes 5,000 ducats expense per season per employee or family member. Say you have 50 total NPCs, the cost is 250kd. If this figure is more than half your family expense, you will be paying extra for any NPCs that put it over that 50% mark. What this amounts to, is that people with a very small income can't afford to hire too many employees, though you should have no problem keeping as many as you need, plus spares. If your family expense is 100kd/season (a VERY small Noble), you could afford to keep 10 NPCs without extra charge. If it's 1,000kd/season, you can afford up to 100. This is probably far more than you need. Wealthier nobles can basically have as many NPCs as they want without worrying about cost. So firing a few employees will only help if you've got so many that you're past the 50% expense mark for NPCs. If you've got less than that, firing them won't make a difference at all. These can be negative, meaning you make money, if you have an outstanding bailiff, either yourself or an NPC. Remember, that if your spouse has better skills, AND a higher leadership rating, she has the effect on family expenses. Fourteenth century nobles were outrageous spendthrifts and the wives were often the worst offenders.