fixedamount

Fixed amount is a monetary value set at a specific dollar amount that does not change with usage, time, or outcome. It is the opposite of variable or tiered amounts that depend on quantity, performance, or other factors. The concept is used across finance, budgeting, contracts, and philanthropy to provide predictability and simplify planning.

In contracts and procurement, a fixed-amount contract specifies a total price for a well-defined scope, with the seller bearing the risk of cost overruns. In budgeting, organizations may allocate a fixed amount for discretionary expenses, locking in a cap regardless of actual needs. In taxation, some credits or subsidies are fixed-dollar amounts rather than a percentage of income. In philanthropy, donors may designate a fixed-amount grant awarded in full or in installments, independent of project milestones.

Advantages include forecasting simplicity, ease of administration, and reduced negotiation complexity. Limitations include reduced flexibility, potential misalignment with actual costs or demand, and exposure to inflation if the fixed amount does not adjust over time.

Examples include fixed-amount tax credits (e.g., a flat $1,000 credit), fixed-amount grants, fixed-price contracts, and fixed-period fixed-amount annuities.

Related concepts include fixed costs, lump-sum payments, and variable pricing. The term is also used in software and systems design to denote a constant parameter or budget constraint.