The wage and salary bill in Austrian manufacturing industry is divided into a fixed and a variable part on the assumption that wages of skilled labour and salaries can be regarded as fixed, wages of unskilled and semi-skilled workers as variable cost. The excess of value added (factor incomes) over the variable wage cost (“gross profit”) is shown to be more stable in the trade cycle than the excess of value added over the total wage cost (“net profit”); this accords with the idea of a relatively stable mark-up on variable cost.