Break-Even Calculator
Find how many units you must sell to cover fixed and variable costs. Free break-even calculator with contribution margin and margin of safety.
About the Break-Even Calculator
The break-even point is the sales volume at which total revenue exactly covers total costs — below it your business loses money, above it every extra sale is profit. This free break-even calculator takes your total fixed costs, selling price per unit and variable cost per unit, and instantly shows the break-even point in units and in revenue, plus the contribution margin per unit and contribution margin ratio.
The formula is: break-even units = fixed costs ÷ (price per unit − variable cost per unit). The bracketed term is the contribution margin — the amount each sale contributes towards fixed costs like rent, salaries and utilities. If you also enter your current sales volume, the calculator shows your margin of safety: how far sales can fall before you slip into a loss.
Small business owners, startup founders, freelancers pricing a product and business students all use break-even analysis to test whether a price point makes sense. Because everything runs in your browser, you can try different prices and cost structures and see the break-even point update live — no signup, no data leaves your device.
How to Use the Break-Even Calculator
- 1Enter your total fixed costs for the period (rent, salaries, utilities).
- 2Enter the selling price per unit and the variable cost per unit.
- 3Optionally add your current sales in units to see the margin of safety.
- 4Read the break-even units, break-even revenue and contribution margin instantly.
Frequently Asked Questions
How do I calculate the break-even point in units?
Divide fixed costs by the contribution margin per unit (price minus variable cost). For example, with fixed costs of 50,000, a selling price of 25 and a variable cost of 15, the contribution margin is 10, so you break even at 50,000 ÷ 10 = 5,000 units, or 125,000 in revenue.
What is contribution margin and why does it matter?
Contribution margin is what remains from each sale after variable costs — it is the money available to pay fixed costs. If you sell at 25 with 15 of variable cost, each unit contributes 10. Once total contributions cover fixed costs, every additional unit adds its full contribution margin straight to profit.
What is margin of safety in a break-even calculation?
Margin of safety is the gap between your actual sales and the break-even point, usually shown as a percentage. If you sell 8,000 units and break even at 5,000, your margin of safety is 3,000 units or 37.5% — sales could drop by that much before you start losing money.
What happens if my variable cost is higher than my price?
There is no break-even point — every unit you sell increases your loss, because the contribution margin is negative. The calculator flags this situation. You would need to raise the price, cut the variable cost per unit, or discontinue the product.
Does the break-even calculator work for services, not just products?
Yes. Treat one billable hour or one project as a 'unit'. For example, a consultant with 30,000 of monthly fixed costs charging 5,000 per project with 2,000 of variable delivery cost breaks even at 10 projects per month (30,000 ÷ 3,000).