Break-Even Calculator
Enter your fixed costs, your selling price and your variable cost per unit. You get the number of units and the revenue you need before sales cover every cost, plus a chart of the break-even point.
Enter your numbers
Your result
Enter your fixed costs, selling price and variable cost per unit to find your break-even point.
What this means
How the break-even calculation works
Your break-even point is the amount you must sell before your sales cover all of your costs. Below it you lose money, above it you make a profit. The calculator uses these formulas:
The calculator rounds break-even units up to whole units, because you cannot sell part of a unit, and it also shows the exact figure. The chart plots revenue and total cost against units sold; the point where the lines cross is the break-even point.
If your selling price is not higher than your variable cost, every sale loses money before fixed costs are even counted, so there is no break-even point. The calculator will tell you when that happens.
Worked examples
These figures are made up to show the arithmetic. They are not a benchmark.
- Fixed costs: 3,000. Selling price: 50. Variable cost per unit: 20.
- Contribution margin = 50 - 20 = 30 per unit.
- Break-even units = 3,000 / 30 = 100 units.
- Break-even revenue = 100 x 50 = 5,000.
- Fixed costs: 1,000. Selling price: 30. Variable cost per unit: 12.50.
- Contribution margin = 30 - 12.50 = 17.50.
- Exact break-even = 1,000 / 17.50 = 57.14 units, so you need 58 whole units.
- Revenue at 58 units = 58 x 30 = 1,740.
Fixed costs and variable costs
The most common mistake with break-even is putting a cost in the wrong group. Fixed costs do not change with the number of units you sell in the period: rent, insurance, software subscriptions, salaries and loan repayments. Variable costs rise with every unit: materials, packaging, shipping, sales commissions and most payment processing fees.
Some costs are mixed. A payment processor that charges a percentage is variable, while a monthly platform fee is fixed. Put each part in its own group. Keep the period consistent too: if your fixed costs are monthly, the result tells you the units you need per month.
What this calculator cannot tell you
- Several products. The calculator handles one product or service at a time. For a mix, use an average price and average variable cost weighted by how much of each you expect to sell.
- Changing prices and costs. Discounts, bulk-buying savings and rising supplier costs change the numbers. Recalculate when they do.
- Your own pay. If you want to be paid, include your pay in fixed costs. Otherwise you may reach break-even and still have nothing to live on.
- Services. For a service business, a unit can be one project, one client per month or one billable hour. Choose the unit that matches how you charge.
How to lower your break-even point
There are three ways, and most businesses use a mix. Raise your price or your margin: a strong brand can support a higher price, as we explain in premium pricing, and the way a price is framed matters too (price anchoring). Cut variable costs per unit. Or reduce fixed costs, for example by reviewing the subscriptions you no longer use (delete junk tools). If you sell related items, bundling changes both your price and your cost per sale, so recalculate after you try it.
Break-even tells you how much you need to sell. To judge whether a campaign can help you get there, try the Marketing ROI Calculator.
Related tools and reading
Frequently asked questions
Can break-even units be a fraction?
The exact calculation often gives a fraction, such as 57.14 units. Because you sell whole units, the calculator rounds up and shows both figures.
Should my own salary be included?
If you want the business to pay you, yes. Add your pay to fixed costs. Otherwise the break-even point only shows when the business stops losing money, not when it supports you.
How often should I recalculate?
Whenever your price, your supplier costs or your fixed costs change, and at least a few times a year. Costs drift, and an old break-even figure can mislead you.
What if I sell more than one product?
Use a weighted average price and a weighted average variable cost based on your expected sales mix, or run the calculation for each product with a fair share of the fixed costs.
Does break-even include taxes?
Not unless you enter them. Treat taxes that depend on sales, such as sales tax collected for the authorities, separately, and add any fixed tax costs to your fixed costs.