What are Fixed Costs?

In the business environment, fixed costs are expenses that don't fluctuate in respect to the amount of goods or services provided. Fixed costs remain and need to be reimbursed independent on business activity.

What are examples of fixed costs?

Virtually all businesses are subject to fixed costs. They may include the lease of the premises, employee salaries (if their wages don't fluctuate based on hours worked), property taxes, insurance, licenses, and depreciation of assets.