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Break-Even Calculator

Calculate your break-even point in units and revenue. Enter fixed costs, variable costs, and selling price to see exactly when your business stops losing money and starts turning a profit. Free, no sign-up.

Last revised 2 September 2026

By Team GlobalCalqulate · About our editorial standards

Cost & Revenue Details

Total Fixed Costs ($)

Costs that don't change with sales volume (rent, salaries, insurance).

Variable Cost per Unit ($)

Cost to produce each unit (materials, labor, shipping).

Selling Price per Unit ($)

The price you sell each unit for.

Calculation Type

Show how changes in price or costs affect break-even.

Sensitivity Scenarios (Optional)

e.g., Price +10%, Costs -5%

Financial Disclaimer: This result is an educational estimate produced by applying a standard formula to the figures you entered. It is not an offer, a quotation, or financial advice: real costs and returns depend on a provider's pricing, fees and underwriting, and on circumstances this calculator does not collect. Confirm the figures with the provider or a qualified adviser before acting on them. Full disclaimer.

Sources & methodology

Formula:: Contribution margin
Reference:: U.S. Small Business Administration (SBA)
Content last updated:: September 2026
Scheduled re-verification:: September 2027

Calculation type: Exact calculation. Figures are taken from U.S. Small Business Administration (SBA) — see sources below.

Your entries stay on this device. This calculator runs entirely in your browser — the figures you type are not sent to us or to anyone else. The page itself uses cookies for analytics and advertising, described in the privacy policy.

Formula & methodology

Formula used

Contribution margin

contribution per unit = price − variable cost per unit

What each unit sold contributes towards covering fixed costs, once its own variable cost is paid.

Break-even in units

break-even units = fixed costs ÷ contribution per unit

How many units must be sold before fixed costs are fully covered and profit begins.

Break-even in revenue

break-even revenue = break-even units × price

The same point expressed as sales value.

Contribution margin ratio

CM ratio = contribution per unit ÷ price

The share of every sales dollar available to cover fixed costs and profit.

Variable definitions

Symbol	Meaning	Unit
fixed costs	Fixed costs. costs that do not change with volume — rent, salaries, insurance	currency
variable cost	Variable cost per unit. cost incurred for each additional unit produced	currency
price	Price per unit. the selling price of one unit	currency

Step-by-step calculation

1. Enter fixed costs for the period
Use a consistent period — monthly fixed costs give a monthly break-even.
2. Enter price and variable cost per unit
The price must exceed the variable cost, or no volume of sales can ever break even.

Limitations

Assumes price and variable cost per unit stay constant at every volume. In practice both move with scale, discounting and supplier terms.
Treats all fixed costs as genuinely fixed over the period; stepped costs such as a second shift or another machine are not modelled.
This is a single-product model. A business with a product mix has a break-even that depends on that mix.

This page is educational. It applies a standard formula to the figures you enter and shows the arithmetic behind the result. It is an estimate, not an offer, a quotation or financial advice: real costs depend on the provider's pricing, fees and underwriting, and on circumstances this calculator does not collect.

Sources & references

Calculate your break-even point — small business guide — U.S. Small Business Administration (SBA)

Help & FAQs

Frequently Asked Questions

Clear answers to common questions to help you use this calculator confidently.

How do I calculate my break-even point?

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Divide your total fixed costs by your contribution margin per unit (selling price minus variable cost per unit). For example, with $50,000 fixed costs, $50 selling price, and $25 variable cost: Break-Even = $50,000 ÷ ($50 − $25) = 2,000 units. For break-even revenue, multiply units by selling price: 2,000 × $50 = $100,000.

What is a good contribution margin?

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A contribution margin ratio above 50% is generally healthy, but this varies by industry. Software companies often exceed 80%, while retailers may operate at 30-40%. Track whether your margin is improving or declining over time — the trend matters more than the absolute number.

How can I lower my break-even point?

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Three ways: reduce fixed costs (renegotiate rent, cut subscriptions), increase selling price (if the market allows), or reduce variable costs (find cheaper suppliers, improve efficiency). Even $1 changes per unit can significantly reduce your break-even.

What's the difference between break-even and profitability?

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Break-even is where you're neither losing nor making money (revenue = costs). Profitability starts after break-even, where each additional unit generates pure profit equal to the contribution margin. If your margin is $25 and you break even at 2,000 units, selling 2,500 means $12,500 profit.

What costs should I include in fixed vs variable?

Tap to view the answer

Fixed costs: rent, salaries, insurance, software subscriptions, equipment leases — anything that stays the same regardless of sales. Variable costs: raw materials, direct labor tied to production, shipping, packaging, sales commissions — anything that scales with each unit produced or sold.

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How to Use This Calculator

Enter Fixed Costs

Input your total fixed costs — rent, salaries, insurance, and other expenses that stay the same regardless of how many units you sell.

Enter Variable Cost per Unit

Input what it costs to produce or deliver one unit — materials, direct labor, shipping, and packaging.

Enter Selling Price per Unit

Input the price customers pay for each unit.

Review Your Break-Even Point

See exactly how many units you need to sell (and how much revenue that means) to cover all costs. Anything above is profit.

Understanding Your Results

Break-Even Point
The number of units or revenue needed to cover all costs — where total revenue equals total costs and profit is zero.
Contribution Margin
Selling price minus variable cost per unit. This is the amount from each sale that contributes to covering fixed costs.
Fixed Costs
Costs that remain constant regardless of sales volume — rent, salaries, insurance, software subscriptions.
Margin of Safety
How far your actual or projected sales exceed the break-even point. A larger margin means more room for error.

Key Tips

✓
Lowering fixed costs directly reduces the number of units you need to sell to break even.
✓
Increasing selling price improves contribution margin — but check if the market will bear the higher price.
✓
A contribution margin ratio above 50% is generally healthy, though this varies by industry.
✓
Run sensitivity analysis to understand how changes in costs or pricing affect your break-even — this is your risk buffer.
✓
Break-even analysis ignores cash flow timing — make sure you can fund operations until sales cover costs.

Understanding Break-Even Analysis

What Is Break-Even Analysis?

Break-even analysis tells you the exact point where your business changes from losing money to making money. It answers the question: 'How many units do I need to sell to cover all my costs?' At the break-even point, total revenue equals total costs — there is no profit and no loss. For any business launching a product, evaluating a new venture, or setting pricing, this is one of the most fundamental financial calculations. The formula is straightforward: Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). The denominator — price minus variable cost — is called the contribution margin, because each unit sold contributes that amount toward covering fixed costs.

Fixed Costs vs Variable Costs — Getting the Numbers Right

Fixed costs stay the same regardless of how many units you produce or sell. Think rent, salaried employee wages, insurance premiums, software subscriptions, and equipment leases. These costs exist even if you sell nothing. Variable costs scale with production — raw materials, hourly labor directly tied to production, shipping, packaging, and sales commissions. Getting accurate numbers for both is critical. If you underestimate variable costs, your break-even point will look more favorable than it really is, and you'll lose money even when you think you should be profitable. Review your actual expense records rather than relying on estimates.

Contribution Margin — The Key Number to Watch

The contribution margin (price minus variable cost per unit) tells you how much each sale contributes to covering fixed costs. The contribution margin ratio (contribution margin ÷ selling price) tells you what percentage of each dollar of revenue is available for fixed costs and profit. A ratio of 50% means half of every dollar goes toward fixed costs and profit — the other half goes to variable costs. Improving your contribution margin — by raising prices, lowering variable costs, or both — is the most powerful way to lower your break-even point and increase profitability. The calculator shows both the per-unit margin and the ratio so you can track this over time.

Sensitivity Analysis — Testing 'What If' Scenarios

Business conditions rarely stay constant. Your material costs might rise, a competitor might force you to lower your price, or your fixed costs might increase with expansion. Sensitivity analysis tests how your break-even point changes under different assumptions. The calculator's sensitivity feature lets you model scenarios like a 10% price increase or a 5% cost reduction. For example, if raising your price from $50 to $55 changes your break-even from 2,000 to 1,667 units, you can see the exact impact of that pricing decision before implementing it. Use sensitivity analysis to stress-test your business model before committing to changes.

Limitations of Break-Even Analysis

Break-even analysis is a static model — it assumes fixed costs, variable costs, and selling price all remain constant, which they won't in practice. It does not account for economies of scale (variable costs that decrease at higher volumes), seasonality, or cash flow timing. A business can be profitable on a break-even basis but still run out of cash if customers pay slowly. It also assumes every unit produced is sold — inventory build-up isn't modeled. Use break-even analysis as a starting point for financial planning, not as the final word. Combine it with cash flow projections, market demand analysis, and competitive research for a complete picture.

Formulas Used by This Calculator

Contribution Margin per Unit = Selling Price − Variable Cost per Unit. Contribution Margin Ratio = Contribution Margin per Unit ÷ Selling Price. Break-Even Units = Fixed Costs ÷ Contribution Margin per Unit. Break-Even Revenue = Break-Even Units × Selling Price. Profit at any sales volume = (Units Sold × Contribution Margin per Unit) − Fixed Costs. For example, at 2,500 units (500 above the $50,000/$25/$50 example's break-even of 2,000), profit = (2,500 × $25) − $50,000 = $12,500.

Common Mistakes When Estimating Break-Even

Forgetting hidden fixed costs — utilities, insurance, accounting, and depreciation are easy to leave out of a rough estimate, which understates fixed costs and makes break-even look lower than it really is. Using list price instead of actual average price — if customers routinely get discounts, the real average price they pay is lower than the sticker price, which raises the true break-even point. Mixing one-time costs into monthly fixed costs — an equipment purchase or setup fee is not a recurring monthly expense and will distort the calculation if treated as one. Assuming variable cost per unit stays constant at every volume, when bulk discounts or added shifts can change it materially at scale.

Formula & methodology

Formula used

Contribution margin

contribution per unit = price − variable cost per unit

What each unit sold contributes towards covering fixed costs, once its own variable cost is paid.

Break-even in units

break-even units = fixed costs ÷ contribution per unit

How many units must be sold before fixed costs are fully covered and profit begins.

Break-even in revenue

break-even revenue = break-even units × price

The same point expressed as sales value.

Contribution margin ratio

CM ratio = contribution per unit ÷ price

The share of every sales dollar available to cover fixed costs and profit.

Variable definitions

Symbol	Meaning	Unit
fixed costs	Fixed costs. costs that do not change with volume — rent, salaries, insurance	currency
variable cost	Variable cost per unit. cost incurred for each additional unit produced	currency
price	Price per unit. the selling price of one unit	currency

Step-by-step calculation

1. Enter fixed costs for the period
Use a consistent period — monthly fixed costs give a monthly break-even.
2. Enter price and variable cost per unit
The price must exceed the variable cost, or no volume of sales can ever break even.

Limitations

Assumes price and variable cost per unit stay constant at every volume. In practice both move with scale, discounting and supplier terms.
Treats all fixed costs as genuinely fixed over the period; stepped costs such as a second shift or another machine are not modelled.
This is a single-product model. A business with a product mix has a break-even that depends on that mix.

Calculator inputs

Cost & Revenue Details

Your results

Sources & methodology

Formula & methodology

Formula used

Contribution margin

Break-even in units

Break-even in revenue

Contribution margin ratio

Variable definitions

Step-by-step calculation

Limitations

Sources & references

How do I calculate my break-even point?

What is a good contribution margin?

How can I lower my break-even point?

What's the difference between break-even and profitability?

What costs should I include in fixed vs variable?

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Calculator inputs

Cost & Revenue Details

Your results

Sources & methodology

How to Use This Calculator

Example: Small Business with $50,000 Fixed Costs

Understanding Your Results

Key Tips

Understanding Break-Even Analysis

What Is Break-Even Analysis?

Fixed Costs vs Variable Costs — Getting the Numbers Right

Contribution Margin — The Key Number to Watch

Sensitivity Analysis — Testing 'What If' Scenarios

Limitations of Break-Even Analysis

Formulas Used by This Calculator

Common Mistakes When Estimating Break-Even

Formula & methodology

Formula used

Contribution margin

Break-even in units

Break-even in revenue

Contribution margin ratio

Variable definitions

Step-by-step calculation

Limitations

Sources & references

How to Use This Calculator

Example: Small Business with $50,000 Fixed Costs

Understanding Your Results

Key Tips

Understanding Break-Even Analysis

What Is Break-Even Analysis?

Fixed Costs vs Variable Costs — Getting the Numbers Right

Contribution Margin — The Key Number to Watch

Sensitivity Analysis — Testing 'What If' Scenarios

Limitations of Break-Even Analysis

Formulas Used by This Calculator

Common Mistakes When Estimating Break-Even