Fixed Charge

DEFINITION of 'Fixed Charge'

Any type of fixed expense that recurs on a regular basis. Fixed charges can include insurance, salaries, utilities, vehicle payments, loan payments and mortgage payments. These charges allow both individuals and businesses to create more predictable budgets and estimate their cash flows more accurately.

BREAKING DOWN 'Fixed Charge'

Both businesses and individuals can have fixed charges. Businesses may have liability or malpractice insurance, while individuals pay car and home insurance. Businesses can often deduct many or all of their fixed charges as business expenses.

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