Fixed Charges Law and Legal Definition

Fixed charges are expenses to be defrayed by a business or industry whether or not the place of business or plant is in operation for the time. It is charges which spread over the entire establishment. Examples of fixed charges are taxes, mortgage interest, insurance, depreciation, rent etc.

The following is an example of a case law referring to fixed charges:

The term "fixed charges" has no fixed meaning, but its meaning is more or less general and indefinite, depending somewhat upon the connection in which it is used and the object and intention of the parties by whom it is employed. "Fixed charges," as such term is used in a strike insurance policy, are those charges which spread over an entire establishment, such as rent, insurance, taxes, mortgage interest, depreciation and the like, according to whether a plant is leased or owned. Such charges arise out of the very being of the plant and continue whether or not the business is operated. [Standard Printing & Publishing Co. v. Bothwell, 143 Md. 303 (Md. 1923)].