What is a fixed charge amount?

Fixed charges, a term also used interchangeably with fixed costs or fixed expenses, encompass business outlays that occur regularly and do not fluctuate with the operational pace of an enterprise.

These expenses remain constant, irrespective of whether the business experiences a surge or decline in activity.

In contrast to variable costs, which directly correlate with the volume of business conducted, fixed charges remain steady and predictable.

Examples of fixed charges can include rent for office space, salaries of non-commissioned employees, insurance premiums, and property taxes.

Despite their stability, managing fixed charges is crucial for businesses to maintain financial health and profitability.