Break-Even Calculator
Find the exact point where your revenue covers your costs. Enter your fixed costs, selling price and variable cost per unit to get your break-even point in units and revenue, your contribution margin, your margin of safety and a chart showing where the two lines cross.
- Break-even chart
- Units and revenue
- Target profit & margin of safety
- Instant, nothing stored
Equal to $12,857 in revenue per month
Revenue versus total cost
How it works out
Why this break-even calculator is different
A break-even point is only useful if you can see how fragile it is. Most calculators hand you one number and leave you guessing whether you are comfortably clear of it or one bad month away from trouble.
You can see the crossing point
A live chart plots revenue against total cost and marks exactly where they meet, which makes the relationship obvious in a way a single figure never does.
Margin of safety included
Enter what you expect to sell and see how far sales can fall before you start losing money — in units, in revenue and as a percentage.
Target profit, not just zero
Breaking even is the floor, not the goal. Enter the profit you actually want and get the sales volume that delivers it.
Contribution margin explained
You get the margin per unit and the ratio, the two numbers that actually drive the answer, rather than a black-box result.
Speaks your language
Name your unit — coffees, subscriptions, billable hours — and every result is labelled with it. Eight currencies and four time periods supported.
Catches impossible pricing
If your variable cost is at or above your price, no volume will ever save you. The calculator says so plainly instead of returning infinity.
How to use the break-even calculator
- 1
Add up fixed costs
Everything you pay regardless of sales: rent, salaries, software, insurance, loan payments. Use one consistent period.
- 2
Set price and variable cost
Variable cost is what one extra sale costs you — materials, shipping, payment processing, commission.
- 3
Read the break-even point
You get the number of units and the revenue figure that puts you exactly at zero profit for the period.
- 4
Stress-test it
Add your expected sales and a target profit to see your margin of safety and what volume your goal really requires.
The break-even formula
The break-even point is the sales volume at which total revenue exactly equals total cost, leaving zero profit and zero loss. Everything rests on one intermediate figure: contribution margin.
Contribution margin = Price per unit − Variable cost per unit Break-even units = Fixed costs ÷ Contribution margin Break-even revenue = Break-even units × PriceContribution margin is what each sale contributes towards covering your fixed costs. Once fixed costs are fully covered, every further sale contributes that same amount straight to profit.
Worked example
Say your fixed costs are 8,000 a month, you sell at 45 and each unit costs you 17 to produce and deliver. Your contribution margin is 45 − 17 = 28. Divide 8,000 by 28 and you need 286 units a month, which at 45 each is about 12,857 in revenue.
Adding a profit target
Units for target profit = (Fixed costs + Target profit) ÷ Contribution marginWanting 5,000 of profit on top means covering 13,000 rather than 8,000, so you need 465 units instead of 286 — a 63% increase in volume for a target that sounds modest. That gap is why break-even analysis is worth doing before you set a price.
For service businesses
If you sell time rather than products, your unit is a billable hour or a retainer. Variable cost is often near zero, which makes contribution margin almost equal to price and pushes the break-even point down sharply — but fixed costs, mainly salaries, are usually much higher.
Fixed costs versus variable costs
Getting this split right matters more than any other input. A cost put in the wrong column will move your break-even point substantially.
| Fixed costs | Variable costs |
|---|---|
| Rent and rates | Raw materials |
| Salaried staff | Packaging and shipping |
| Insurance | Payment processing fees |
| Software subscriptions | Sales commission |
| Loan repayments | Hourly or piece-rate labour |
| Accountancy fees | Marketplace or platform cut |
Semi-variable costs
Some costs sit awkwardly between the two. A phone plan with a monthly fee plus usage charges, or a salesperson on a base salary plus commission, should be split: the guaranteed portion goes in fixed, the per-sale portion in variable.
What the break-even point does not tell you
- Timing. Break-even is about volume, not cash flow. You can be above break-even on paper and still run out of money waiting on invoices.
- Demand. The calculation assumes you can sell the required volume. Whether the market wants that many is a separate question.
- Price elasticity. Raising price lowers your break-even point mathematically, but only if customers still buy at the higher price.
- Step costs. Fixed costs jump when you outgrow a space or hire another person, so your break-even point resets rather than staying flat forever.
Three ways to lower it
Raise your price, cut variable cost per unit, or reduce fixed overheads. Price is usually the most powerful lever because it increases contribution margin directly — a 10% price rise often cuts the break-even point by far more than a 10% cost saving.
How price changes move your break-even point
With fixed costs of 8,000 a month and a variable cost of 17 per unit, small changes in price shift the required volume dramatically.
| Selling price | Contribution margin | Break-even units | Break-even revenue |
|---|---|---|---|
| 25 | 8 | 1,000 | 25,000 |
| 30 | 13 | 616 | 18,480 |
| 35 | 18 | 445 | 15,575 |
| 45 | 28 | 286 | 12,870 |
| 55 | 38 | 211 | 11,605 |
| 75 | 58 | 138 | 10,350 |
Going from 25 to 30 — a 20% price rise — cuts the volume you need by nearly 40%. This is the single most useful thing break-even analysis shows, and it is why underpricing is so much more dangerous than most founders assume.
Break-even calculator FAQs
How do you calculate the break-even point?
Subtract the variable cost per unit from the selling price to get your contribution margin, then divide your fixed costs by that figure. With 8,000 in fixed costs, a price of 45 and a variable cost of 17, the contribution margin is 28 and the break-even point is 286 units. Multiply by the price to get the equivalent revenue.
What is contribution margin?
Contribution margin is the amount each sale contributes towards covering fixed costs, calculated as selling price minus variable cost per unit. Expressed as a percentage of price it becomes the contribution margin ratio, which lets you work out break-even in revenue terms without knowing unit volumes at all.
What is the difference between fixed and variable costs?
Fixed costs stay the same regardless of how much you sell — rent, salaries, insurance, software. Variable costs rise with each unit sold, such as materials, shipping, payment fees and commission. Costs with both elements, like a phone plan with usage charges, should be split across the two.
What is a good margin of safety?
Margin of safety is how far sales can fall from expected before you hit break-even. Many businesses treat 20% or more as comfortable, while under 10% means a modest downturn tips you into a loss. It is a better indicator of resilience than the break-even point on its own, which is why this calculator shows both.
How do I calculate break-even in sales revenue instead of units?
Divide fixed costs by the contribution margin ratio, where the ratio is contribution margin divided by price. With a margin of 28 on a price of 45, the ratio is 0.622, and 8,000 divided by 0.622 gives about 12,860 in revenue. This method is useful when you sell many different products and cannot work in single units.
Can a business have no break-even point?
Yes. If your variable cost per unit is equal to or higher than your selling price, contribution margin is zero or negative and every additional sale increases your loss. No volume fixes this — you have to raise the price or cut the unit cost. The calculator flags this case rather than returning an impossible number.
How does break-even analysis handle multiple products?
Use a weighted average contribution margin based on your expected sales mix, or work in revenue terms using the contribution margin ratio for the business as a whole. Both approaches assume the mix stays roughly stable, so recheck them whenever your product balance shifts.
Should break-even include tax and loan payments?
Break-even is normally calculated before tax and before interest, since it measures operating performance. If you want the sales volume that covers loan repayments too, add those repayments to fixed costs, or put your after-tax profit goal in the target profit field and treat the result as a cash target rather than an accounting one.
This calculator is for general business planning and education. It is not accounting, tax or financial advice — talk to a qualified accountant before making pricing or investment decisions.
Know the number you have to hit
Break-even in units and revenue, contribution margin, margin of safety and the volume your profit target actually needs — in one screen.