Definition: Fixed expenses remain the same no matter how much you use of a or service or consumer item. The cost of a fixed expense doesn't change from one period to another or changes only very slightly and are usually paid on a regular basis, such as week to week, month to month, quarter to quarter or year to year. This consistency makes this type of cost is easier to budget for than a variable expense.
Typical household fixed expenses are mortgage or rent payments, car payments, real estate taxes and insurance premiums.
In small business a fixed cost is a regular expense that doesn't change according to production. Typical small business fixed expenses are charges for internet access, long-term machine rental and insurance.
Also Known As: Fixed Cost