Fixed expenses

Fixed expenses are associated with the production of a good or service. Fixed expenses are a set amount per unit and will not vary with the amount of sales, production or service provided.

The salary of an NFL player is a fixed expense to the team, their employer, over the life of a contract. Tom Brady signs a $10 million per year contract for 3 years to play for the New England Patriots. Regardless of how well Tom plays or how many games he plays in a season, the Patriots will pay $10 million dollars to keep him employed.