Break-Even Calculator

Find out exactly how many units you need to sell to cover all your costs. This break-even calculator shows your break-even point in units and revenue, contribution margin, and how many units you need to hit a specific profit target.

Fixed Costs*(currency)

Total fixed costs for the period, such as rent, salaries, insurance, loan payments, and software subscriptions. These costs stay the same regardless of how many units you sell.

Variable Cost Per Unit*(currency)

The cost that changes with each unit produced or sold, including materials, packaging, shipping, and payment processing fees.

Selling Price Per Unit*(currency)

The price at which you sell each unit to customers.

Target Profit(currency)

Optional: enter a profit goal to find out how many units you need to sell to reach it, beyond just breaking even.

Break-even analysis is one of the most fundamental calculations for any business. It tells you the minimum sales volume required to cover your fixed and variable costs, which means no profit but also no loss. This calculator takes your fixed costs, variable cost per unit, and selling price per unit to compute the break-even point, contribution margin per unit, contribution margin ratio, and the number of units required to reach a specific profit target.

How It Works

Break-Even Formula

Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost Per Unit)

The break-even point is calculated by dividing total fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit. This tells you how many units you need to sell so that total revenue exactly equals total costs.

Contribution margin per unit equals the selling price minus the variable cost per unit. This is the amount each sale contributes toward covering fixed costs.

Break-even units equals fixed costs divided by the contribution margin per unit. You need to sell at least this many units to avoid a loss.

Break-even revenue is the break-even units multiplied by the selling price per unit.

Contribution margin ratio is the contribution margin per unit divided by the selling price, expressed as a percentage.

Units for target profit equals (fixed costs + target profit) divided by the contribution margin per unit.

Important Notes:

•This calculator uses a linear cost-volume-profit model, which assumes selling price and variable cost per unit remain constant regardless of volume.
•In reality, you may get volume discounts on materials or need to lower prices to sell more units, which changes the break-even point.
•Fixed costs are assumed to remain constant within the relevant range. If you need to add equipment, staff, or warehouse space to increase volume, your fixed costs change.
•Break-even units are rounded up to the nearest whole number because you cannot sell a fraction of a unit.
•This analysis does not account for taxes, time value of money, or seasonal demand fluctuations.

Worked Example

A small business has $5,000 in monthly fixed costs (rent, software, insurance). Each product costs $12 to make and ship, and sells for $30. The owner wants to know how many units they need to sell to break even and how many to earn $3,000 in profit.

Inputs:

fixed Costs:5,000
variable Cost Per Unit:12
selling Price Per Unit:30
target Profit:3,000

Result:

The contribution margin is $18 per unit (60% ratio). The break-even point is 278 units, requiring $8,340 in revenue. To reach the $3,000 profit target, the business needs to sell 445 units generating $13,350 in revenue.

Who Is This Calculator For?

small business owners
startup founders
product managers
ecommerce sellers
entrepreneurs evaluating new products

Frequently Asked Questions

The break-even point is the number of units you need to sell for total revenue to equal total costs. At the break-even point you have zero profit and zero loss. Every unit sold beyond this point generates profit equal to the contribution margin.

Fixed costs stay the same regardless of how many units you sell, such as rent, insurance, and salaries. Variable costs change with each unit produced or sold, such as materials, packaging, and shipping. Understanding this distinction is critical for accurate break-even analysis.

Contribution margin is the selling price minus the variable cost per unit. It represents how much each unit sold contributes toward covering your fixed costs. Once all fixed costs are covered, each additional unit's contribution margin becomes pure profit.

A high break-even point usually means either your fixed costs are large relative to your contribution margin, or your contribution margin per unit is small because variable costs are close to the selling price. You can lower the break-even point by reducing fixed costs, lowering variable costs, or increasing your selling price.

Yes. For a service business, the selling price per unit is your rate per service or project, variable costs include time-based labor and materials per job, and fixed costs include office space, software, and base salaries. The same formula applies.

Recalculate whenever your costs or pricing change significantly. This includes rent increases, supplier price changes, new hires that add to fixed costs, or price adjustments on your products. Most businesses should review break-even at least quarterly.

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Last updated: April 11, 2026