What is a Fixed Expense?

Fixed Expense (Definition)

A fixed expense is an expense for a company that is the same amount every time it is paid. Business owners usually pay these weekly, monthly, quarterly, or annually and they are generally easy to budget for. It can include things like mortgage or rent payments, employee wages, car payments, real estate taxes, and insurance costs. Although they are referred to as “fixed” rates, they can often be changed, if necessary, usually during a renewal period or annually (such as a rent increase). Fixed expenses are often paid on the same day or near the same time, which gives business owners the opportunity to schedule these payments and prepare in advance - they may even be able to set up automatic payments.