Finance
Break-Even Calculator
Find the exact point where revenue finally covers costs. Enter your fixed costs, price, and variable cost per unit to get the break-even point in units and revenue — with the contribution margin, a live break-even chart, target profit, and margin of safety, all updating as you type.
Your numbers
Rent, salaries, software — costs that don't move with volume.
$
$
$
Break-even point
417units
≈ $16,680 in revenue · 416.7 exact, rounded up
Contribution / unit
$12.00
Contribution margin
30%
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The basics
What is the break-even point?
The break-even point is the moment a business stops losing money and starts making it — the sales volume at which total revenue exactly covers total costs and profit is zero. It rests on one idea: every sale throws off a little cash toward the fixed bills, and once enough sales have piled up, those bills are paid and the next sale is pure profit.
break-even units = fixed ÷ (price − variable)
In units
Divide your fixed costs by the contribution each unit makes after its own variable cost. The answer is how many units you must sell before profit turns positive.
$5,000 ÷ ($40 − $28) ≈ 417 units
break-even revenue = fixed ÷ margin ratio
In revenue
The same point read in dollars: divide fixed costs by the contribution margin ratio. Useful when you sell a mix of products and think in revenue, not units.
$5,000 ÷ 0.30 ≈ $16,667
Method
How to calculate break-even by hand
Three steps turn three numbers into the answer.
- 1
Find the contribution margin
Subtract the variable cost per unit from the selling price. What is left is the contribution margin — the cash each sale adds toward fixed costs.
$40 − $28 = $12 per unit - 2
Divide fixed costs by the margin
Divide your total fixed costs by that per-unit contribution. The result is the exact number of units needed to cover everything.
$5,000 ÷ $12 = 416.7 units - 3
Round up and convert to revenue
Round up to a whole unit — you cannot sell a fraction — then multiply by the price to read the break-even point in revenue.
⌈416.7⌉ = 417 → 417 × $40 = $16,680
Worked examples
See break-even across business types
The same formula runs a product maker, a subscription app, a consultancy, and a café. Only the words around the numbers change — the math is identical.
A maker selling a physical product.
Given fixed = $5,000, price = $40.00, variable = $28.00
Contribution margin: $40.00 − $28.00 = $12.00 per unit
Break-even units: $5,000 ÷ $12.00 = 416.7 → 417
Break-even revenue: 417 × $40.00 = $16,680
Break-even = 417 units · $16,680
Where it shows up
Why break-even matters
Break-even analysis is the quiet workhorse behind pricing, planning, and the go/no-go call on a new idea.
Pricing
Setting the price
A small price change moves the contribution margin and the break-even point sharply. Run the numbers before you discount or raise prices.
Planning
Sales targets
Break-even gives every salesperson and founder a concrete floor: the volume that must be hit before anyone talks about profit.
Go / no-go
New products
Before launching, ask whether the break-even volume is realistically achievable. If it isn't, the idea needs reworking, not a bigger budget.
Reference
The break-even formulas
Five formulas cover everything on this page. They are all built from the same contribution margin.
CM = price − variable cost
Contribution margin (per unit)
The cash one sale contributes toward fixed costs once its own variable cost is paid.
ratio = CM ÷ price
Contribution margin ratio
The same contribution as a share of price — the fraction of every revenue dollar that is available to cover fixed costs.
units = fixed ÷ CM
Break-even in units
How many units clear total fixed costs. Round up to the next whole unit.
revenue = fixed ÷ ratio
Break-even in revenue
The break-even point measured in sales dollars rather than unit count.
units = (fixed + profit) ÷ CM
Target-profit units
Fold the profit you want into fixed costs, then solve as usual.
MoS = (sales − BE) ÷ sales
Margin of safety
How far current or expected sales sit above break-even, as a share of sales.
Worth knowing
Rules and pitfalls
The arithmetic is simple; the judgement is in the inputs. These are the things that trip people up.
price > variable cost
The margin must be positive
If variable cost meets or beats the price, no break-even exists — selling more only loses more. Fix the price or the cost first.
round up, never down
Always round units up
The exact figure is rarely whole. Round up so the last partial unit's contribution isn't lost to a small residual loss.
fixed vs variable
Classify costs carefully
Mislabelling a variable cost as fixed (or vice versa) shifts the answer. Step costs — those that jump at certain volumes — deserve special care.
one period, one number
Match the time frame
Fixed costs are per period (a month, a year). Your break-even volume is for that same period — don't mix a monthly rent with an annual target.
taxes & loans excluded
It is pre-tax, pre-financing
Classic break-even ignores income tax and loan principal. For a cash break-even, add required debt payments to fixed costs.
aim above the line
Break-even is a floor, not a goal
Breaking even means zero profit. Use the target-profit and margin-of-safety tools to set a real, profitable target above it.
Quick chart
Break-even at different prices
Pricing is the biggest lever on break-even. Hold your fixed and variable costs steady and watch the break-even point fall as the price rises — every extra dollar of price is extra contribution margin.
Break-even point at each price.
| Price / unit | Contribution | Break-even units | Break-even revenue |
|---|---|---|---|
| $35 | $7 | 715 | $25,025 |
| $42 | $14 | 358 | $15,036 |
| $49 | $21 | 239 | $11,711 |
| $56 | $28 | 179 | $10,024 |
| $70 | $42 | 120 | $8,400 |
| $84 | $56 | 90 | $7,560 |
| $112 | $84 | 60 | $6,720 |
| $140 | $112 | 45 | $6,300 |
FAQ
Common questions
The break-even point is the level of sales at which total revenue exactly equals total costs, so profit is zero. Sell one unit beyond it and you start making a profit; one unit short and you take a loss. It is the first milestone every business has to clear.
Divide total fixed costs by the contribution margin per unit (selling price minus variable cost per unit): break-even units = fixed costs ÷ (price − variable cost). Multiply that by the price to get the break-even revenue. For $5,000 of fixed costs, a $40 price, and a $28 variable cost, that is 5,000 ÷ 12 ≈ 417 units, or about $16,680 in revenue.
The contribution margin is what each sale contributes toward fixed costs after its own variable cost is covered: price per unit minus variable cost per unit. Expressed as a percentage of price it is the contribution margin ratio. Once the accumulated contribution margin equals total fixed costs, you have broken even.
Fixed costs stay the same no matter how much you sell — rent, salaries, software, insurance, equipment. Variable costs are incurred per unit sold — materials, packaging, shipping, and payment processing fees — so they rise and fall with volume. Break-even analysis hinges on splitting your costs cleanly into these two buckets.
Because you cannot sell a fraction of a unit and still fully cover your costs. If the formula returns 416.7 units, selling 416 leaves a small loss, so you round up to 417 — the first whole unit at which revenue has covered every fixed and variable cost.
Add the profit you want to your fixed costs, then divide by the contribution margin per unit: units = (fixed costs + target profit) ÷ contribution margin. Treating the desired profit as an extra fixed cost to cover is the standard cost-volume-profit move, and the calculator does it for you in the advanced panel.
The margin of safety is how far your expected or actual sales sit above the break-even point — in units, in revenue, or as a percentage of sales. A wide margin of safety means sales can fall a long way before you slip into a loss; a thin one means you are operating close to the edge.
Then the contribution margin is zero or negative, every sale loses money, and no break-even point exists — selling more only deepens the loss. The fix is structural: raise the price, cut the variable cost per unit, or change the product so that each sale contributes something toward fixed costs.
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Ugo CharlesBuilt and fact-checked against our editorial standards · Last updated June 2026
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