Break-Even Calculator
Units and revenue needed to break even from fixed costs, price and variable cost per unit, plus contribution margin and a target-profit option.
Break-Even Calculator: with the default inputs, break-even units is 500.
Costs that don't change with volume over the period: rent, salaries, insurance, loan payments, software.
Materials, direct labor, packaging, payment fees, commissions — anything that scales with each sale.
Rounded up — you can't sell a fraction of a unit.
- Exact break-even units
- 500
- Break-even revenue
- $25,000
- Contribution margin per unit
- $20.00
- Contribution margin ratio
- 40%
- Margin of safety
- —How far sales can fall from your forecast before you lose money. Only when expected sales are entered.
- Profit at expected sales
- —
Assumptions
- Price and variable cost per unit are constant across all volumes.
- All fixed costs are for the same period as the sales volume (usually a month or a year).
| Units | Revenue | Total cost | Profit |
|---|---|---|---|
| 250 | $12,500 | $17,500 | -$5,000 |
| 375 | $18,750 | $21,250 | -$2,500 |
| 500 | $25,000 | $25,000 | $0 |
| 625 | $31,250 | $28,750 | $2,500 |
| 750 | $37,500 | $32,500 | $5,000 |
| 1,000 | $50,000 | $40,000 | $10,000 |
How this is worked out
The formula
Contribution margin (CM) = price − variable cost per unit CM ratio = CM ÷ price Break-even units = fixed costs ÷ CM Break-even revenue = fixed costs ÷ CM ratio Units for a target profit = (fixed costs + target profit) ÷ CM Margin of safety = (expected sales − break-even sales) ÷ expected sales
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Fixed costs
- Costs that don't change with volume over the period: rent, salaries, insurance, loan payments, software.in dollars · 0 or more · defaults to 10000
- Selling price per unit
- A number.in dollars · 0 or more · defaults to 50
- Variable cost per unit
- Materials, direct labor, packaging, payment fees, commissions — anything that scales with each sale.in dollars · 0 or more · defaults to 30
- Target profit(under More options)
- Profit you want on top of covering costs. 0 gives the pure break-even point.in dollars · 0 or more · defaults to 0
- Expected sales (units)(under More options)
- Optional. Enter your forecast to get the margin of safety.0 or more · defaults to 0
What you get back
- Break-even unitsmain answer
- Rounded up — you can't sell a fraction of a unit.
- Exact break-even units
- Break-even revenue
- Contribution margin per unit
- Contribution margin ratio
- Margin of safety
- How far sales can fall from your forecast before you lose money. Only when expected sales are entered.
- Profit at expected sales
What this assumes
- Price and variable cost per unit are constant across all volumes.
- All fixed costs are for the same period as the sales volume (usually a month or a year).
About this calculator
Break-even is the volume at which a business, product or project stops losing money: the point where the contribution from each sale has paid off all the fixed costs. Below it you're funding the business; above it, every additional unit drops its full contribution margin to the bottom line. It's the first number to check before launching a product, signing a lease or hiring.
Sorting costs into fixed and variable
Fixed costs stay the same whether you sell one unit or a thousand in the period you're looking at — rent, salaried staff, insurance, software subscriptions, loan payments, depreciation. Variable costs scale with each unit — materials, hourly production labor, packaging, shipping, card-processing fees, sales commissions. Some costs are semi-variable (utilities, a delivery van); split them by judgment. Use a consistent period: monthly fixed costs give a monthly break-even.
Contribution margin is the engine
Price minus variable cost is the contribution margin — what each sale contributes toward fixed costs and then profit. A $50 product with $30 of variable cost contributes $20; with $10,000 of monthly fixed costs you need 500 sales a month. The contribution margin ratio (40% here) lets you talk in revenue instead of units, which is easier when you sell many products: $10,000 ÷ 0.40 = $25,000 of monthly revenue.
Beyond break-even
Enter a target profit under More options and the calculator tells you the volume that delivers it — break-even for the owner's salary, in effect. Enter your expected sales to see the margin of safety: how far below forecast you can land and still not lose money. Under 20% is thin; a new venture with a 10% margin of safety is a coin flip.
Using the chart
The revenue line starts at zero and climbs at the price per unit; the total-cost line starts at fixed costs and climbs at the variable cost per unit. Where they cross is break-even. The vertical gap to the right is profit, to the left is loss. Steeper revenue relative to cost (a higher contribution margin) means you reach break-even sooner and profit grows faster afterwards — but also that fixed costs hit harder if sales fall short.
Limits
Break-even assumes the price and unit cost stay constant across volumes. In practice, volume discounts lower unit costs, and moving lots of units may require price cuts or more fixed costs (another shift, a bigger space). Re-run it for each step change.
Frequently asked questions
▸How do I calculate the break-even point?
Divide fixed costs by the contribution margin per unit (price minus variable cost). $10,000 in fixed costs and a $20 contribution margin means 500 units. For revenue, divide fixed costs by the contribution margin ratio.
▸What is contribution margin?
The amount each sale contributes toward fixed costs and profit: price minus variable cost per unit. It's the most useful number in pricing because it shows what one more sale is actually worth.
▸What's a good margin of safety?
Higher is better; many analysts want at least 20–25% for an established business, more for a startup. It's the percentage your forecast can miss by before you lose money.
▸How do I break even faster?
Three levers: raise the price, cut the variable cost per unit, or cut fixed costs. Because contribution margin is the divisor, a small price increase often does more than a large cut in fixed costs.
▸Does break-even include my own salary?
Only if you put it in fixed costs. Many owners forget this and 'break even' while working for free. Either include your salary in fixed costs or enter it as the target profit.
Put this calculator on your own site
A working break-even, free for any site, with no ads and no sign-up. It resizes to fit wherever you paste it and updates itself as this page improves.
Paste this anywhere. It works on any site, carries no ads, never expires, and always shows the current version.
Break-Even Calculator by CalculateItNow
The page's own title. The clearest description of what the link leads to.
The credit line sits outside the widget on purpose, so it is a real link on your page rather than one buried in a frame. Please keep it — it is what pays for CalculateItNow staying free and ad-free. The script only resizes the widget to fit its contents; drop it and the widget still works.
Browse every calculator widget·How to add it to WordPress, Squarespace or Wix
Related calculators
The questions people ask next to a break-even.
Gross margin, markup and profit from cost and price — or the selling price for a target margin — with the margin-vs-markup table that trips everyone up.
Gross, operating and net profit with their margins from revenue, cost of goods sold, operating expenses, other costs and tax rate — an income statement with a chart.
Return on investment and annualized ROI from what you put in, what you got back and how long it took, with the work shown and ROI vs CAGR vs IRR explained.
The hourly rate a freelancer must charge to hit a target income after expenses, taxes, time off and unbillable hours — plus day rate and revenue needed.
Work out the payment on any amortizing loan — personal, auto or business — with total interest, payoff date, extra payments, and a full amortization schedule.
Customer lifetime value from order value, purchase frequency, gross margin and lifespan or churn, with discounted CLV, CLV:CAC ratio and payback period.