Break-Even Calculator — Find Your Break-Even Point
Find out how many units you need to sell to cover your costs. Visualize revenue vs expenses and understand your contribution margin. All calculations happen locally — nothing leaves your browser.
What is the break-even point? The break-even point is the sales volume at which total revenue exactly equals total costs, so profit is zero. Measured in units it is fixed costs divided by the contribution margin — the selling price of one unit minus its variable cost. With $10,000 of fixed costs, a $50 price and $30 of variable cost, the margin is $20 and the break-even point is 500 units.
How to Use the Break-Even Calculator
- Enter your fixed costs — Rent, salaries, insurance, software subscriptions, loan payments — anything you pay for the period whether you sell one unit or ten thousand. Use one consistent period; a monthly fixed-cost figure gives you a monthly break-even volume.
- Enter the variable cost per unit — Materials, packaging, payment processing fees, shipping and direct labour for a single unit — the costs that only exist because you made one more. Leave out anything you would still pay at zero sales.
- Set the price per unit — This is the price the customer actually pays, after discounts and before sales tax. The price must exceed the variable cost; if it does not, the contribution margin is zero or negative and the tool shows 0 units because no volume can ever cover the fixed costs.
- Add your projected units sold — This input does not change the break-even point. It feeds the safety margin — how far sales can fall from your forecast before the business posts a loss.
- Read the headline figures — The hero shows break-even units rounded up to a whole unit, plus the revenue that volume produces. The stat cards give contribution margin as a percentage of price and safety margin as a percentage of projected sales.
- Check the crossing point on the chart — The green line is revenue starting at zero; the red line is total cost starting at your fixed costs. The amber marker sits where they cross. A shallow angle between the two lines means a thin margin and a break-even point that moves a long way when any input changes.
How the Break-Even Calculation Works
Break-even analysis puts every cost into one of two buckets and then asks a single question: how many units does it take before the money coming in covers both buckets? Fixed costs sit there whatever you sell. Variable costs arrive one unit at a time. The gap between the price of a unit and its variable cost is the contribution margin — the cash each sale contributes toward the fixed pile.
Contribution margin = price per unit − variable cost per unit Break-even units = fixed costs ÷ contribution marginThe defaults on this page work through like this. A $50 price minus $30 of variable cost leaves a $20 contribution margin, which is 40% of the price. Dividing $10,000 of fixed costs by $20 gives 500 units, and 500 units at $50 is $25,000 of revenue. Sell 499 and you are $20 short; sell 501 and you are $20 ahead. Past the crossing point the contribution margin stops covering fixed costs and starts becoming profit.
Break-even units are rounded up to a whole unit, because you cannot sell 2.14 of something and still be covered. The revenue figure is that rounded volume multiplied by the price, so it is very slightly conservative — the exact break-even revenue is a few dollars lower. If you would rather work in revenue directly, divide fixed costs by the contribution margin ratio instead:
Break-even revenue = fixed costs ÷ (contribution margin ÷ price)That form is the one to reach for when you sell many different items and only know your blended gross margin. A shop running a 40% gross margin against $10,000 of monthly overhead needs $25,000 of sales, without ever counting a unit.
What the safety margin tells you
The safety margin compares your forecast with the break-even point: projected units minus break-even units, also expressed as a percentage of the forecast. At 700 projected units against a 500-unit break-even, the 200-unit cushion is 28.6% of the forecast. Read it as tolerance for being wrong. A 5% safety margin means one mildly disappointing quarter tips you into a loss; 40% means demand has to fall a long way before that happens. The figure is floored at zero, so a forecast below break-even shows 0 units and a label saying you have not reached break-even yet.
Reading the revenue-versus-cost chart
The chart plots two straight lines against units sold. Revenue starts at the origin and climbs at the price per unit. Total cost starts partway up the vertical axis at your fixed costs and climbs at the variable cost per unit, so the vertical gap between the lines at zero units is exactly your fixed-cost burden. They cross once, at the break-even point marked in amber. Left of that crossing you are making a loss, right of it a profit. A shallow angle between the two lines is a warning sign: it means a thin margin, and a break-even point that swings a long way whenever any input moves.
Sorting Costs Into Fixed and Variable
Almost every wrong break-even number traces back to a misfiled cost. The test is not how large the cost is or how often you pay it, but whether the amount changes when volume changes.
| Cost | Type | Why |
|---|---|---|
| Shop or office rent | Fixed | The landlord bills the same amount at zero sales |
| Salaried staff | Fixed | Contracted pay does not track output |
| Insurance, accounting, software seats | Fixed | Renewals are priced by time, not by volume |
| Raw materials and components | Variable | Consumed once per unit produced |
| Packaging and outbound shipping | Variable | One more order means one more box |
| Card processing fees | Variable | Charged as a percentage of each sale |
| Hourly or piece-rate labour | Variable | Hours scale with the order book |
| Sales commission | Variable | Paid per closed deal, so it belongs in the per-unit cost |
| Utilities and metered cloud hosting | Semi-variable | A standing charge plus a usage component — split it, putting the standing charge in fixed and the metered part in variable |
Stepped costs are the awkward case. A second delivery van or a second production shift stays fixed until volume crosses a threshold, then jumps. Model each step as its own scenario rather than averaging across them: run the calculator once with today's fixed costs and once with the higher figure, and note the volume band in which each answer is the valid one.
How Margin Moves the Break-Even Point
Contribution margin is the denominator, so the relationship between margin and volume is not a straight line — halving the margin doubles the units you need. The table below holds fixed costs at $10,000 and varies only the margin per unit.
| Price | Variable cost | Contribution margin | Margin % | Break-even units |
|---|---|---|---|---|
| $50 | $45 | $5 | 10% | 2,000 |
| $50 | $40 | $10 | 20% | 1,000 |
| $50 | $30 | $20 | 40% | 500 |
| $50 | $20 | $30 | 60% | 334 |
| $55 | $30 | $25 | 45.5% | 400 |
| $50 | $27 | $23 | 46% | 435 |
The last two rows are the pair worth studying. A $5 price rise and a $3 cut in variable cost both lift the margin, but the price rise lifts it further and needs no supplier negotiation — which is why pricing is usually the first lever anyone pulls. It is also the riskiest one, because a price change affects how many units you sell, and this model assumes it does not.
Examples
Coffee Shop
Fixed costs: $5,000/mo (rent, equipment, staff)
Variable cost: $2/cup (beans, milk, cup)
Price: $5/cup
Break-even: $5,000 ÷ ($5 − $2) = 1,667 cups/month
SaaS Subscription
Fixed costs: $20,000/mo (servers, salaries, marketing)
Variable cost: $5/user (support, bandwidth)
Price: $30/user/mo
Break-even: $20,000 ÷ ($30 − $5) = 800 users
Freelance Web Design
Fixed costs: $3,000/mo (home office, software, internet)
Variable cost: $100/project (stock assets, hosting)
Rate: $1,500/project
Break-even: $3,000 ÷ ($1,500 − $100) = 2.14 projects (~3)
Three Levers That Move the Number
There are only three inputs, so there are only three things you can change. Ranked by how much movement they usually buy:
- Raise the price. Every dollar goes straight into the margin, and because the margin is the denominator the effect compounds. On the defaults here, moving from $50 to $55 cuts break-even from 500 units to 400 — a 10% price rise buys a 20% volume reduction. The catch is that it also changes demand, which no break-even model accounts for.
- Cut the variable cost. Better supplier terms, lighter packaging, a cheaper payment processor and less waste all widen the margin without touching the price. The gains are smaller per dollar than a price rise, but they carry no demand risk.
- Cut the fixed costs. This shifts the numerator, so the effect is proportional rather than compounding: drop $2,000 of overhead from $10,000 and break-even falls exactly 20%. Converting a fixed cost into a variable one — contractors instead of salaried staff, usage-priced hosting instead of reserved capacity — lowers break-even but flattens the profit curve above it.
Which lever to pull depends on how far above break-even you expect to run. A business that will comfortably clear the point wants the widest margin it can hold, because every unit past the crossing earns that margin. A business unsure of hitting the volume at all wants the lowest fixed base it can operate on, because that is what determines how bad a bad month gets.
What Break-Even Analysis Leaves Out
The model is a straight line through a curved world, and knowing where it bends keeps you from over-trusting it. It assumes one price for every unit, so volume discounts, promotions and channel-specific pricing all break the assumption unless you use an average selling price. It assumes a constant variable cost, when in practice materials get cheaper in bulk and more expensive in a rush. It assumes fixed costs hold across the whole range shown, when in reality they step up as you add capacity.
It is also a profit calculation, not a cash calculation. Passing break-even on paper does not mean money has arrived: inventory is bought before it is sold, invoices are paid weeks after they are issued, and a business can be profitable and still run out of cash. Tax, interest and depreciation are not modelled here either — the result is an operating break-even, and covering it is the floor rather than the goal.
For a business with several products, run the calculator once per product line using that line's own price and variable cost, then check the numbers against a blended revenue break-even. Per-product results tell you which lines carry the overhead; the blended figure tells you whether the whole operation clears it. If your sales mix shifts, the blended answer shifts with it even when nothing about any individual product has changed.
This calculator is an informational planning tool, not financial advice. It works from the figures you enter and models a simplified single-product business. Check the numbers against your actual accounts, and talk to an accountant or financial adviser before pricing decisions, loan applications or investor material rest on them.
Frequently Asked Questions
Divide total fixed costs by the contribution margin, where the contribution margin is your selling price per unit minus the variable cost per unit. The formula is break-even units = fixed costs ÷ (price − variable cost). With $10,000 of monthly fixed costs, a $50 price and $30 of variable cost, that is 10,000 ÷ 20 = 500 units per month. Enter your own three figures above and the calculator does the division and rounds up to a whole unit.
A fixed cost is one whose total does not change when volume changes: rent, salaried wages, insurance, accounting fees, software subscriptions, loan payments and depreciation. The question is not how often you pay it but whether the bill would still arrive if you sold nothing this month. Utilities and metered hosting are usually semi-variable — split the standing charge into fixed and the usage-based part into your per-unit cost.
Because your price is at or below your variable cost, which makes the contribution margin zero or negative. When each sale loses money before fixed costs are even considered, no volume can ever cover them, so there is no finite break-even point and the tool reports zero rather than a misleading number. Raise the price above the variable cost, or lower the variable cost, and a real figure appears.
No. The arithmetic and the chart both run in JavaScript in your browser, and nothing is uploaded, logged or stored on a server. One thing to be aware of: the four inputs are also written into the page URL so you can bookmark or share a scenario. That link carries your fixed costs, unit costs, price and forecast, so treat it as confidential before pasting it into a chat or a ticket.
Units when you sell one product at one price, because a unit count is something a production or sales plan can act on. Revenue when you sell a mixed basket and only know your blended gross margin — divide fixed costs by the contribution margin ratio and you get a sales target without needing per-item data. A restaurant or a retail shop almost always wants the revenue form; a manufacturer with one SKU wants units.
There is no universal threshold, but the figure is best read as how wrong your forecast can be. Below roughly 10% a single soft month puts you into a loss, so businesses in that position usually carry cash reserves or a flexible cost base. A high safety margin is comfortable but can also signal that fixed costs are lower than the opportunity would support. Compare the number against how volatile your demand actually is rather than against a benchmark.
Only if you put them in. This is an operating break-even: it covers whatever you list as fixed and variable costs and nothing else. If you want the volume that covers a salary for yourself, add that salary to fixed costs. If you want to cover loan interest, add the interest. Corporation tax is charged on profit, so it does not affect the break-even point itself, but it does affect what a given volume above break-even is worth to you.
Run it once per product line, using that line's own price and variable cost and only the fixed costs that line genuinely carries, then sanity-check the total with a blended revenue break-even for the whole business. Per-product results show which lines pay for the overhead; the blended figure shows whether the operation as a whole clears it. Remember that the blended answer moves whenever your sales mix moves, even if no individual product has changed.
Use Cases
Signing a Retail Lease
Before committing to a shop unit, add the monthly rent and service charge to your fixed costs and see how many covers, coffees or orders a day the lease alone demands. If the daily number is higher than the footfall you can realistically serve, the lease answers itself.
Deciding Whether to Discount
Run the current price, then the sale price, and compare break-even volumes. A 20% discount on a 40% margin halves the contribution per unit, so the promotion has to roughly double sales just to stand still — which is usually the argument the meeting needs.
Pricing a Craft or Etsy Product
Put materials, packaging and platform fees into the variable cost, and your tool subscriptions, booth fees and studio rent into fixed costs, to find how many pieces a month the hobby has to sell before it pays for itself rather than being subsidised.
Sizing a SaaS Subscriber Target
Treat monthly hosting, support and salaries as fixed, per-seat infrastructure and payment fees as variable, and read off the paying-customer count that covers the burn. Re-run it with a higher plan price to see how many fewer accounts the same runway needs.
Preparing a Loan or Grant Application
Lenders ask what volume makes the business viable and how much room the forecast leaves. Take the break-even units, the revenue figure and the safety margin percentage straight into the financial section of the application, with the chart as the supporting exhibit.
Justifying a New Hire
Add the fully loaded salary to fixed costs and note how far break-even volume moves. That extra volume is what the hire has to generate or enable to pay for themselves, expressed as units rather than as a vague sense that the team is stretched.