Break-even calculator
Enter your fixed costs, your selling price and what each unit costs you to make or buy. You'll see how many units cover your costs, the sales that takes, and the profit at the volume you expect.
Costs that stay the same however much you sell, such as rent, salaries, insurance and software, for one period (a month, say).
What a customer pays, before sales tax or VAT.
What each extra sale costs you: materials, packaging, shipping, payment fees, commission.
In the same period as the fixed costs. Shows profit and margin of safety.
- Contribution margin per unit
- $15.00
- Contribution margin ratio
- 60%
- Units to break even
- 667
- Sales to break even
- $16,675.00
The exact break-even point is 666.67 units, or $16,666.67 of sales (fixed costs ÷ contribution margin ratio). You can't sell part of a unit, so it's rounded up.
Revenue and costs by units sold
Show the numbers
| Units | Revenue | Total costs | Profit |
|---|---|---|---|
| 0 | $0.00 | $10,000.00 | -$10,000.00 |
| 500 | $12,500.00 | $15,000.00 | -$2,500.00 |
| 667 | $16,675.00 | $16,670.00 | $5.00 |
| 1,000 | $25,000.00 | $20,000.00 | $5,000.00 |
| 1,500 | $37,500.00 | $25,000.00 | $12,500.00 |
- Nothing is uploaded
- Free, no sign-up
- Works on phone and desktop
How to find your break-even point
- 1
Enter your fixed costs for a period, such as a month: rent, salaries, insurance, software and other costs that don't change with sales.
- 2
Enter the price one unit sells for and its variable cost: what it costs you to make, buy, pack and ship it.
- 3
Read the break-even point in units and in sales, and how much each unit contributes towards your fixed costs.
- 4
Add the units you expect to sell to see your profit or loss, your margin of safety and where you sit on the chart.
Features
Units and sales
See how many units cover your costs, rounded up to whole units, and the sales that adds up to.
Contribution margin
What each sale adds towards fixed costs, in money and as a share of the price.
Profit and margin of safety
Enter the volume you expect to see your profit and how far sales could fall before you make a loss.
A chart of the crossing
Revenue and total cost lines with the break-even point marked. Hover for the numbers at any volume.
The formulas
- Contribution margin = price per unit − variable cost per unit
- Contribution margin ratio = contribution margin ÷ price × 100
- Break-even units = fixed costs ÷ contribution margin (rounded up)
- Break-even sales = fixed costs ÷ contribution margin ratio
- Profit = units × contribution margin − fixed costs
- Margin of safety = (expected sales − break-even sales) ÷ expected sales × 100
A worked example
A small candle business pays $3,200 a month for its studio, insurance, website and the owner's draw. Each candle sells for $28 and costs $9.50 in wax, wick, jar, label and packaging.
- Each candle contributes $18.50, a contribution margin ratio of 66.07%.
- Break-even is $3,200 ÷ $18.50 = 172.97, so 173 candles a month, or $4,844 of sales.
- Selling 260 candles makes a profit of $1,610, with a margin of safety of 87 candles (33.47%).
- To pay the owner another $2,000 a month on top, the business needs 282 sales.
How price moves the break-even point
With $10,000 of fixed costs and a $10 variable cost per unit:
| Price | Contribution | Break-even units | Break-even sales |
|---|---|---|---|
| $20 | $10 (50%) | 1,000 | $20,000 |
| $25 | $15 (60%) | 667 | $16,675 |
| $30 | $20 (66.7%) | 500 | $15,000 |
| $35 | $25 (71.4%) | 400 | $14,000 |
| $40 | $30 (75%) | 334 | $13,360 |
Doubling the price from $20 to $40 cuts the units needed by 67%, because the contribution per unit triples. That's why a small price rise often does more for profit than the same percentage rise in sales volume, as long as customers don't leave. It works the other way too: a discount comes straight out of the contribution margin.
Getting the inputs right
- Use one period throughout. If you enter a month of fixed costs, the answer is units per month, and the expected units must be monthly too.
- Pay yourself. If you need a salary from the business, put it in fixed costs. Otherwise "breaking even" means working for nothing.
- Count every per-unit cost. Card and marketplace fees, packaging, shipping you don't charge for, returns and sales commission all belong in the variable cost, not just materials.
- Use the price you keep. Leave out sales tax or VAT, and take off any average discount you give.
What break-even analysis leaves out
The model assumes a straight line: one price, one variable cost per unit and fixed costs that don't move. Real businesses get bulk discounts, run sales, hire a second person once volume grows, and sell a changing mix of products. Treat the answer as a planning figure for the range of volumes you're likely to see, and re-run it when prices or costs change. It's arithmetic, not financial advice.
Check the margin on each product with the margin calculator, set prices from your costs with the markup calculator, and see whether a campaign's cost per sale fits inside your contribution margin with the CPM calculator. For a one-off investment such as new equipment, the ROI calculator shows the return.
Frequently asked questions
How do you calculate the break-even point?
Divide your fixed costs by the contribution margin per unit, which is the price minus the variable cost. With $10,000 of fixed costs, a $25 price and a $10 variable cost, each unit contributes $15, so you break even at 666.67 units, rounded up to 667.
What is contribution margin?
The price of a unit minus its variable cost: the money each sale leaves to pay fixed costs and then make a profit. As a share of the price it's the contribution margin ratio: $15 of a $25 price is 60%.
What counts as a fixed cost and what is a variable cost?
Fixed costs stay the same whatever you sell in the period: rent, salaries, insurance, loan payments, software subscriptions. Variable costs rise with every unit: materials, packaging, shipping, card and marketplace fees, sales commission. Some costs are a mix, such as a phone plan with a fixed fee plus usage; split them as best you can.
How do I find the break-even point in sales dollars?
Divide fixed costs by the contribution margin ratio. $10,000 ÷ 60% = $16,666.67. The calculator also shows the sales at the rounded-up number of units, $16,675, since you can't sell part of a unit.
What is the margin of safety?
How far your sales can fall before you make a loss: expected sales minus break-even sales, often as a percentage of expected sales. Selling 1,000 units against a break-even of 667 gives a margin of safety of 333 units, or 33.33%.
How many units do I need to sell to make a target profit?
Add the profit you want to your fixed costs and divide by the contribution margin. For a $5,000 profit on the example above: ($10,000 + $5,000) ÷ $15 = 1,000 units.
What if I sell more than one product?
Use averages weighted by your sales mix: the average price and the average variable cost of a typical unit sold. The answer holds only while the mix stays the same; selling more of your low-margin products pushes the break-even point up.
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