Fixed costs stay the same when your sales go up or down: salaries, rent, insurance, the team's software. Variable costs rise and fall with each sale: payment fees, usage-based hosting, anything you pay per customer. Sort your own expense list into the two piles and you get two numbers you need for almost every money decision, your monthly floor and the number of customers it takes to break even.
This post sorts one small SaaS company's actual monthly budget, including the lines that do not sort cleanly.
The test
For each line on last month's expenses, ask: if we had sold twice as much, would this line have been different?
No means fixed. Yes means variable. The size of the cost does not matter, and neither does how often it is paid. A €150 insurance premium and a €21,000 payroll are both fixed, because neither moves when a customer signs.
One company's budget, sorted
The company sells a €90-a-month subscription to 180 customers, so revenue is €16,200 a month.
| Expense | Last month | Pile | Why |
|---|---|---|---|
| Salaries (three people, loaded cost) | €21,000 | Fixed | Same in a slow month and a record one |
| Coworking desks | €1,200 | Fixed | Monthly contract, indifferent to sales |
| Team software (chat, docs, design) | €900 | Fixed | Priced per employee, not per customer |
| Accountant | €450 | Fixed | Monthly retainer |
| Insurance | €150 | Fixed | Annual premium, paid monthly |
| Google Ads | €2,000 | Fixed (by choice) | Set by you, not by sales; more on this below |
| Cloud hosting | €1,640 | Semi-variable | A base cost plus usage per customer |
| Payment processing | €288 | Variable | A fee on every charge |
| Support contractor, paid per ticket | €540 | Variable | More customers, more tickets |
Payment processing is the easiest variable cost to check. Stripe's standard price for European Economic Area cards is 1.5% plus €0.25 (Stripe pricing), so a €90 charge costs €1.60 and 180 of them cost €288.
Are salaries fixed or variable costs?
Salaries are fixed costs. An employee on a monthly salary costs the same whether you sold 10 subscriptions this month or 1,000. They are usually the largest fixed cost a startup has, which is why what a hire really costs is worth working out before an offer goes out.
Pay that tracks activity is variable: sales commission, overtime, and contractors paid per ticket, per project or per hour of client work. A salesperson on a base salary plus commission is both, and belongs on two lines, the base in fixed and the commission in variable.
Splitting the semi-variable lines
The hosting bill has a floor you pay at zero customers and a part that grows with usage. Split it with the high-low method, using your busiest and quietest recent months:
variable cost per customer = (highest bill - lowest bill)
/ (customers in busiest month - customers in quietest month)
= (1,720 - 1,520) / (200 - 150)
= 4 per customer
fixed part = highest bill - (4 x 200) = 920
At 180 customers that gives €920 fixed plus €720 variable, which matches the €1,640 on the bill. It is an estimate from two points, and for a company this size it is enough.
What the two piles tell you
Add up each pile:
- Fixed: €21,000 + €1,200 + €900 + €450 + €150 + €2,000 + €920 = €26,620 a month
- Variable per customer: €1.60 payment fee + €3.00 support + €4.00 hosting = €8.60
Each customer brings in €90 and costs €8.60 to serve, so each one contributes €81.40 toward the fixed pile. That is the contribution margin.
break-even customers = fixed costs / contribution per customer
= 26,620 / 81.40
= 327.0, so 328 customers
The company has 180. Today it loses €16,200 − (180 × €8.60) − €26,620 = €11,968 a month, which is its net burn. The break-even calculator runs the same division with your figures.
This is also where misfiled costs do damage. If the support contractor sat in the fixed pile as a flat €540, the company would think each extra customer is almost pure profit, and its break-even point would be off.
Fixed costs you can cut this month
The split leads people into one common mistake. When cash gets tight, founders look at the variable pile first, because "variable" sounds like the part you can change. In a subscription business the variable pile is small (€1,548 here) and it only shrinks when sales shrink.
When you need to cut, ask which fixed costs you could stop this month, and sort the fixed pile again into committed and discretionary:
- Committed: salaries with notice periods, the coworking contract, the insurance already paid for the year.
- Discretionary: the €2,000 of Google Ads, which you set and could pause tomorrow, and any software you could cancel at the end of the billing period.
The ads line is fixed in the accounting sense, because it does not follow sales, and it is still the fastest cost this company can remove. Cutting costs without cutting muscle covers how to choose what goes.
Keep the two numbers current
The floor (€26,620) and the contribution per customer (€81.40) change every time you add a tool, a hire or a price change, so redo the sort when the budget changes rather than once a year. In Plainhub, each expense is recorded as recurring or one-off with a category, so the recurring total, which for most startups is mostly the fixed floor, is always up to date next to your burn and runway.