Break-Even Calculator

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Find how many units or how much revenue you need to cover your costs and start making profit.

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What is the break-even point?

The break-even point is where total revenue equals total costs — the moment your business stops losing money and starts making a profit. Before break-even, every sale reduces your loss. After it, every sale generates pure profit.

Depending on your business model, a break-even point calculator uses one of two core formulas:

ProductsFixed costs / (Price per unit − Variable cost per unit)
ServicesFixed costs / (1 − Variable cost %)

The gap between price and variable cost is your contribution margin — how much each sale contributes toward covering fixed costs. The higher it is, the fewer break even sales you need. For example, $5,000 in fixed costs divided by a $30 contribution margin ($50 price − $20 variable cost) means you need to sell 167 units to break even.

How to use this calculator

Products mode. Enter your monthly fixed costs (rent, salaries, software), variable cost per unit (materials, shipping, packaging), and selling price. The break even calculator instantly shows break-even in units and revenue, contribution margin, and daily, weekly, and monthly targets. Add your current monthly sales volume to see actual profit or loss.

Services mode. Tailored for businesses where costs are a percentage of revenue — agencies, freelancers, platforms with commissions. Enter your fixed costs and variable cost rate (e.g., 30%) to find the exact revenue needed to break even. A freelancer with $2,000 in monthly fixed costs and a 40% variable cost rate needs $3,333 in monthly revenue to cover all costs.

Target Profit. Add an optional monthly profit goal to see the precise sales volume required to hit it — not just cover your costs. This is especially useful when planning pricing strategy or setting quarterly targets.

Once you know your break-even point, use the Profit Margin Calculator to make sure your pricing generates a healthy margin on top of that threshold.

Frequently Asked Questions

What is the break-even point?
The break-even point is the sales volume where total revenue exactly equals total costs — zero profit, zero loss. Every unit sold above that point generates pure profit. It is the critical threshold your business needs to cross before it starts making money.
How do you calculate the break-even point?
To find your break-even point in units, divide your total fixed costs by the contribution margin per unit. Formula: Break-Even Units = Fixed Costs / (Price per Unit − Variable Cost per Unit). Example: $5,000 fixed costs divided by ($50 - $25) = 200 units to break even.
What is the difference between fixed and variable costs?
Fixed costs stay the same regardless of how much you sell — rent, salaries, and software subscriptions. Variable costs change with each unit sold — materials, packaging, shipping, and transaction fees. Only fixed costs create a break-even threshold; variable costs shift it up or down.
What is the contribution margin?
Contribution margin is how much each sale contributes toward covering fixed costs and generating profit. If your selling price is $50 and the variable cost is $25, your contribution margin is $25/unit (a 50% ratio). A higher contribution margin means you break even with fewer sales.
How can I lower my break-even point?
There are three levers you can pull: raise your selling price, reduce variable costs per unit, or cut fixed costs. Raising your price is usually the most powerful lever because it directly increases your contribution margin without adding costs. Even a 10–15% price increase can significantly reduce the number of units you need to sell to break even.
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