Break-Even Point Calculator
Calculate the number of units you need to sell to cover fixed and variable costs and start making a profit. Includes contribution margin and optional target profit planning.
Break-Even Formula
Complete Guide: Break-Even Point Calculator
Everything you need to know about using this tool effectively
Enter your fixed costs, selling price per unit, and variable cost per unit to calculate your break-even point. The calculator shows the number of units you need to sell, the revenue required, and the contribution margin per unit. You can also set a target profit to see how many additional units are needed beyond break-even.
The break-even point in units is calculated as Fixed Costs divided by (Price per Unit minus Variable Cost per Unit). The contribution margin is Price minus Variable Cost, representing the amount each unit contributes toward covering fixed costs. Revenue at break-even equals the break-even units multiplied by the selling price. Target profit units add the desired profit to fixed costs before dividing by the contribution margin.
Startup planning
Determine how many units a new business must sell to cover initial costs and reach profitability.
Pricing decisions
Test different price points to see how they affect the number of units needed to break even.
Product launch analysis
Evaluate whether a new product line can realistically achieve break-even given market size and costs.
Financial forecasting
Build break-even scenarios into cash flow projections and business plans for investors.
Enter your fixed costs
Input all monthly or annual fixed costs such as rent, salaries, insurance, and equipment.
Set price and variable cost per unit
Enter the selling price and the variable cost (materials, labor, shipping) for each unit sold.
View break-even and target profit results
The calculator shows units and revenue needed to break even, and optionally how many more units are needed for a profit target.
Re-calculate break-even whenever your fixed costs or pricing changes significantly
Use monthly figures for all inputs to keep the time period consistent
A higher contribution margin means fewer units are needed to break even
Test worst-case and best-case scenarios by adjusting your price and variable cost assumptions
What is a break-even point?
The break-even point is the level of sales at which total revenue equals total costs, meaning the business neither makes a profit nor incurs a loss. It is the minimum sales volume required to cover all fixed and variable costs.
What are fixed costs?
Fixed costs are expenses that do not change with the number of units produced or sold. Examples include rent, salaries, insurance premiums, loan payments, and equipment leases.
What is the contribution margin?
The contribution margin is the selling price per unit minus the variable cost per unit. It represents how much each sale contributes toward covering fixed costs and generating profit once fixed costs are covered.
Can I calculate break-even for a service business?
Yes, treat each service offering or billable hour as a unit. Enter the hourly rate or service fee as the price and the direct cost of delivering that service as the variable cost.
How do I handle multiple products?
For multiple products, calculate a weighted average contribution margin based on the expected sales mix, then use that average in the break-even formula. Alternatively, calculate break-even for each product separately.