Break-Even Calculator
Find your break-even point: enter fixed costs, the selling price and the variable cost per unit to get the contribution margin, the units you need to sell and the revenue that brings in.
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Rent, salaries and other costs that don’t change with sales.
Materials, packaging and other costs per unit sold.
Advanced: target profit
Units you need to sell to also earn this profit.
How do I calculate a break-even point?
Break-even units are fixed costs divided by the contribution margin, which is the price minus the variable cost per unit. With fixed costs of 10,000, a price of 50 and a variable cost of 30, each unit contributes 20, so you break even at 500 units, or 25,000 in revenue. Fractions are rounded up.
- Enter your fixed costs for the period, such as rent and salaries.
- Enter the selling price per unit and the variable cost per unit, such as materials and packaging.
- Read the contribution margin, the break-even units and the break-even revenue. Optionally add a target profit under “Advanced”.
Formulas & Methods
Contribution margin
Example: 50 − 30 = 20
Break-even units
Example: 10,000 ÷ 20 = 500 units
Break-even revenue
Example: 500 × 50 = 25,000
Units for a target profit
Example: (10,000 + 5,000) ÷ 20 = 750 units
Key features
Units and revenue
The break-even point as a number of units and as sales revenue.
Rounded up, never down
If the exact point is 500.2 units, you need to sell 501; the exact value is shown too.
Contribution margin
How much each sale contributes to fixed costs, as an amount and as a percentage of the price.
Target profit
See how many units you need to sell to also earn a profit you choose.
Common uses
- Set a sales target for a month or a season
- See how a price change affects the units you need to sell
What the break-even point assumes
The calculation assumes one selling price and one variable cost per unit, and fixed costs that stay fixed. Real businesses move the point: volume discounts lower the cost per unit, a second machine or another salary steps the fixed costs up, and a sale price lowers the margin on every unit.
Use it to check a plan, then run it again for each scenario, for example at the full price and at the discounted one.
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Frequently Asked Questions
What are fixed and variable costs?
Fixed costs stay the same however much you sell, like rent, insurance and salaries. Variable costs rise with each unit sold, like materials, packaging, shipping and payment fees.
Why is there no break-even point?
When the variable cost per unit is equal to or higher than the price, each sale adds nothing towards fixed costs, so selling more never covers them. Raise the price or lower the cost per unit.
Why is the number of units rounded up?
You can’t sell part of a unit, and selling one unit fewer than the exact break-even point still leaves a small loss.
How is this different from a profit margin?
Profit margin shows the share of each sale that is profit. Break-even shows how many sales you need before fixed costs are covered and profit begins.
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