Break-even Calculator

The exact units and revenue where you stop losing money — and how many sales it takes to hit a profit target on top.

Your cost structure

Rent, salaries, insurance, software — costs that don't change with sales. Use one period (month or year) consistently.

Break-even point

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Break-even revenue—
Contribution / unit—
Contribution ratio—
For target profit—
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Reading the number

Every sale contributes price − variable cost toward the fixed-cost pile; break-even is simply how many contributions fill it. Below that volume each period ends in a loss, above it each extra unit's full contribution becomes profit — which is why profit grows so fast just past break-even.

The formula

Break-even units = fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin — what each sale actually contributes after its own direct costs. Add a profit target to the fixed costs and the same division tells you the volume that reaches it.

Fixed vs variable — the sorting rule

Ask: "if I sold one more unit, does this cost rise?" Materials, packaging, payment fees, per-order shipping — yes, variable. Rent, salaries, insurance, software subscriptions — no, fixed. Semi-variable costs (a salesperson with commission) split: salary to fixed, commission per sale to variable.

Safety margin

If you enter current sales, the calculator shows how far above break-even you operate — the percentage sales can fall before losses start. Under 20% is thin; a single soft month can wipe it out.

Ways to lower your break-even

Only three levers exist: raise price, cut the per-unit variable cost, or cut fixed costs. Price is usually the most powerful — a 10% increase flows straight into contribution — but test it; volume responses differ by market.

Frequently asked questions

What is the break-even formula?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). Break-even revenue = break-even units × price. The denominator is called the contribution margin.
What counts as a fixed cost?
Costs that don't move when one more unit sells: rent, salaries, insurance, software, base utilities. Variable costs rise with each sale: materials, packaging, payment fees, per-order shipping.
How do I include a profit goal?
Add the goal to fixed costs: units = (fixed + target profit) ÷ contribution margin. The calculator has a field for it — $20,000 of profit at a $10 contribution needs 2,000 extra sales.
What if price is below variable cost?
Contribution is negative, so no volume ever breaks even — every extra sale loses more money. The calculator flags it; raise price or cut variable cost first.
What is a margin of safety?
How far current sales sit above break-even, as a percentage: (sales − break-even) ÷ sales. It's the cushion sales can drop before you're losing money — under 20% is considered thin.

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