Break-Even Calculator
This break even point calculator shows the units and revenue you need to cover costs, with a chart of where you break even.
Formula & worked example
Formula: Break-even units = fixed costs ÷ (price − variable cost per unit).
Example: Fixed 5,000, price 25, variable 10: 5,000 ÷ 15 = 333.3, so 334 units and 8,350 in revenue.
Method & source: Cost-volume-profit analysis: fixed costs ÷ contribution margin per unit. See how we test our calculators.
Next step: try profit margin with fees or freelance rate.
The Break-Even Point, Explained
A break-even calculator finds the point where your revenue exactly equals your costs. Sell fewer units than the break-even point and you lose money; sell more and every extra unit is profit.
This break even point calculator uses your fixed costs, the variable cost of each unit and your selling price, and draws a chart so you can see the crossing point for yourself.
Finding Units and Revenue to Break Even
Enter your fixed costs, the variable cost per unit and the price you charge per unit. Optionally add a profit target.
- Contribution margin: Selling price minus variable cost – what each unit contributes toward fixed costs.
- Break-even units: Fixed costs ÷ contribution margin, rounded up to whole units.
- Break-even revenue: The sales value you need to reach that many units.
- Profit target: Units required to earn a specific profit on top of break-even.
- Visual chart: Revenue and total cost lines with the break-even point where they meet.
If the selling price is not higher than the variable cost, the calculator flags that break-even is impossible at that price.
Why Break-Even Analysis Matters
Before launching a product, opening a shop or changing a price, you need to know how much you must sell to stay afloat.
- Judge whether a business idea is realistic.
- Set sales targets based on real costs.
- Test how a price change moves the break-even point.
- Understand the impact of fixed costs such as rent and subscriptions.
- Communicate the numbers clearly to partners or lenders.
A break-even chart turns abstract costs into a target you can plan around. Run the break even point calculator again after any price change to see how the target moves.
Worked walkthrough: a coffee cart
A coffee cart has fixed costs of 2,400 a month (pitch fee, insurance, equipment payments). Each coffee sells for 4.50 and costs 1.30 in ingredients and cups, so each cup contributes 3.20 towards the fixed costs. Break-even is 2,400 ÷ 3.20 = 750 cups a month, or 3,375 in sales. Sell 900 cups and you are 150 cups past the line: 150 × 3.20 = 480 profit. Entering a profit goal of 1,000 raises the target to (2,400 + 1,000) ÷ 3.20 ≈ 1,063 cups. The chart shows the revenue line crossing the cost line at 750.
Practical tips for Break-Even calculations
- Be strict about which costs are fixed. A cost that changes with sales, such as card fees or packaging, belongs in the variable cost per unit.
- Include your own pay in the fixed costs if you want the break-even to cover a wage, not just the bills.
- Test a price change: a small rise in price often lowers break-even units far more than an equal cut in costs.
- Break-even is a monthly or yearly figure depending on the fixed costs you enter. Keep the period consistent with your sales forecast.
- If the tool says the price is not above the variable cost, no volume of sales will ever cover fixed costs – change the price or the cost first.
Fixed costs, variable costs and contribution margin
Break-even analysis separates costs by how they behave. Fixed costs stay the same however much you sell, such as rent, insurance, salaries and software subscriptions. Variable costs rise with each unit, such as ingredients, packaging and card fees. Some costs, like utilities, are part fixed and part variable, and it helps to split them.
The price minus the variable cost of one unit is the contribution margin, the amount each sale contributes towards covering fixed costs and then profit.
The break-even calculation step by step
Divide fixed costs by the contribution margin per unit. A stall with 2,400 of monthly fixed costs sells an item for 12 with 4.50 of variable cost. The contribution margin is 7.50, so break-even is 2,400 ÷ 7.50 = 320 units, or 3,840 in revenue. The contribution margin ratio, 62.5%, gives the same revenue figure: 2,400 ÷ 0.625.
Enter a profit goal and the target moves. To make 1,500 profit as well, the stall needs (2,400 + 1,500) ÷ 7.50 = 520 units. The result is rounded up to whole units, because you cannot sell part of one.
Break-even at different prices: a second worked example
Take a fictional candle business with 3,000 of fixed costs a month and a variable cost of 6 per candle. The table shows what the calculator returns at four selling prices.
| Price per unit | Contribution per unit | Contribution margin | Break-even units | Break-even revenue shown |
|---|---|---|---|---|
| 10 | 4 | 40% | 750 | 7,500 |
| 12 | 6 | 50% | 500 | 6,000 |
| 15 | 9 | 60% | 334 (333.33 exact) | 5,010 |
| 20 | 14 | 70% | 215 (214.29 exact) | 4,300 |
Doubling the price from 10 to 20 cuts the candles needed from 750 to 215, because each sale contributes more than three times as much. Units are rounded up to whole candles, which is why the revenue shown at a price of 15 is slightly above the exact break-even revenue of 5,000. With a target profit of 1,500 at that price, the target becomes 500 candles. Testing a launch offer? The discount calculator gives the sale price to enter here.
Testing price and cost changes
Small changes to the price move the break-even point a lot. Raising the price of the stall’s item from 12 to 13 lifts the contribution margin to 8.50 and lowers break-even to about 283 units, while dropping it to 11 pushes it up to 370. Rerun the calculator with different prices, variable costs and fixed costs to see which lever matters most.
Compare the break-even figure with the sales you realistically expect. If you expect to sell 450 units, the margin of safety is (450 − 320) ÷ 450 = 28.9%, meaning sales could fall by that much before you make a loss.
Reading the chart
The revenue line starts at zero and rises with each unit sold, while the cost line starts at your fixed costs and climbs more slowly. Where they cross is the break-even point. To the left of it the gap between the lines is a loss, and to the right it is profit.
Limits of the model
The model assumes a constant selling price and constant variable cost per unit, and it treats the business as one product. Real businesses have bulk discounts, step costs and product mixes, so treat the result as a planning guide. If the price is not above the variable cost, no number of sales can break even and the tool tells you so. For per-sale margins with fees, use the profit margin calculator, and to set an hourly rate that covers costs use the freelance rate calculator.
Frequently Asked Questions (FAQs)
Divide your fixed costs by the contribution per unit, which is the selling price minus the variable cost of one unit. With 3,000 of fixed costs, a price of 15 and a variable cost of 6, each sale contributes 9, so break-even is 3,000 ÷ 9 = 333.33, rounded up to 334 units. Multiply the units by the price to get break-even revenue.
Costs that stay the same regardless of how much you sell, such as rent, salaries, insurance, software subscriptions and equipment.
Costs that rise with each unit sold, such as materials, packaging, shipping and payment fees.
Enter a target profit. The calculator adds it to fixed costs and shows the units needed to reach both break-even and that profit.
This calculator draws one from your numbers: units sold run along the bottom, with a revenue line starting at zero and a total-cost line starting at your fixed costs. Where the two lines cross is the break-even point. To the left of it costs are higher than revenue, a loss; to the right, the gap between the lines is profit. The chart is part of the page, with no separate image download.
Yes. Enter your fixed costs, selling price and variable cost per unit, and the calculator draws a chart of revenue and total cost by units sold, so you can see where the two lines cross at the break-even point.
Divide fixed costs by the profit on each unit (price minus variable cost). With £5,000 of fixed costs, a £25 price and £10 variable cost per unit, you make £15 a unit, so you need 334 units (333.3 rounded up) to break even.
It is the selling price minus the variable cost of one unit: the amount each sale contributes towards fixed costs and then profit. At a price of 15 and a variable cost of 6 it is 9, or 60% of the price. The calculator shows both the amount and the percentage, and a higher contribution margin means fewer sales are needed to break even.
Any unit above the break-even point adds profit. Enter a profit goal to see the exact number of units needed to reach it.
Multiply the break-even units by the selling price. The calculator rounds units up to whole items first, so with 3,000 of fixed costs, a price of 15 and a variable cost of 6 it shows 334 × 15 = 5,010. The exact figure is fixed costs ÷ contribution margin ratio: 3,000 ÷ 0.60 = 5,000. On the chart, it is where the revenue and cost lines cross.
Yes. Count rent, software, insurance and subscriptions as fixed costs, and materials, packaging and fees per sale as variable costs.
Estimates only – not financial advice. Results are estimates based only on the figures you enter and simplified assumptions (constant prices, costs and rates; no unexpected fees). They are not financial, tax or accounting advice. Check important decisions with a qualified professional. See our full disclaimer.