Find your break-even point in units and sales
The break-even calculator shows how many units you need to sell before your business stops losing money. Enter your fixed costs, the variable cost of each unit and your selling price, and you instantly get the break-even point in units, the break-even revenue, the contribution margin and the sales you need to reach a target profit.
A chart draws your revenue and total cost lines, shades the loss and profit zones and marks the point where they cross. Add your expected sales to see the profit you would make and your margin of safety. It is ideal for testing a new product, a café or shop plan, a pricing change or a business plan for a loan application.
How to use the Break-Even Calculator
- Enter your fixed costs for the period — for example a month: rent, salaries, subscriptions and loan EMIs.
- Enter the variable cost per unit: everything you spend for each extra unit sold.
- Enter the selling price per unit, excluding GST, VAT or sales tax.
- Optionally add a target profit and your expected sales in units.
- Read the break-even units and revenue, then hover over or tap the chart to see profit or loss at any sales volume.
Break-Even Calculator features
Units and revenue
Break-even point in whole units (rounded up) and in sales value.
Contribution margin
Per-unit contribution and the contribution margin ratio, the share of every sale that pays for fixed costs.
Target profit planning
Units and sales needed to earn the profit you want.
Margin of safety
How far expected sales sit above or below break-even.
Interactive chart
Revenue, total cost and fixed cost lines with loss and profit zones, readable in light and dark mode.
Break-even formulas with a worked example
Contribution margin per unit = price − variable cost per unit. Contribution margin ratio = contribution margin ÷ price.
Break-even units = fixed costs ÷ contribution margin per unit. Break-even revenue = fixed costs ÷ contribution margin ratio.
Units for a target profit = (fixed costs + target profit) ÷ contribution margin per unit.
Example: a small bakery has monthly fixed costs of ₹50,000. Each cake costs ₹30 in ingredients and packaging and sells for ₹80, so each one contributes ₹50 towards fixed costs, a 62.5% contribution margin ratio. Break-even is 50,000 ÷ 50 = 1,000 cakes, or ₹80,000 of sales a month. To earn ₹20,000 profit, the bakery needs (50,000 + 20,000) ÷ 50 = 1,400 cakes. If it expects to sell 1,200, profit is 1,200 × 50 − 50,000 = ₹10,000, and its margin of safety is 200 cakes, or 16.7% of expected sales.
Break-even units are rounded up, because selling 333.33 units is not possible — you need the 334th sale to cover the last of your costs.
Fixed costs vs variable costs
Fixed costs stay the same whether you sell nothing or a lot, within a normal range: rent, permanent salaries, insurance, software subscriptions, loan repayments and depreciation. Variable costs rise with every unit: raw materials, packaging, delivery, payment gateway or marketplace commissions and sales commissions.
Some costs are mixed — an electricity bill has a fixed standing charge plus usage. Split them as best you can. If you sell several products, use an average price and variable cost weighted by your expected sales mix, or run the calculator for each product with its share of fixed costs.
How to lower your break-even point
- Raise the price — even a small increase lifts the contribution of every unit. Check the effect on margin with the profit margin calculator or set prices with the markup calculator.
- Cut variable costs by negotiating with suppliers, buying in bulk or reducing waste.
- Reduce fixed costs such as rent, unused subscriptions or idle equipment.
- Be careful with discounts: a 10% price cut can raise break-even sharply when margins are thin — model it with the discount calculator first.
- Remember that break-even analysis assumes a constant price and cost per unit. Results are planning estimates, not financial advice.
Break-Even Calculator FAQ
How do I calculate the break-even point?
Divide your fixed costs by the contribution margin per unit (price minus variable cost). With fixed costs of 30,000, a price of 50 and a variable cost of 20, break-even is 30,000 ÷ 30 = 1,000 units.
How do I calculate break-even revenue?
Divide fixed costs by the contribution margin ratio, or multiply break-even units by the price. In the example above, the ratio is 30 ÷ 50 = 60%, so break-even revenue is 30,000 ÷ 0.6 = 50,000.
What is contribution margin?
It is what each sale contributes to fixed costs and then profit: the selling price minus the variable cost of that unit. A product that sells for 80 and costs 30 to make has a contribution margin of 50, or 62.5%.
What if my price is lower than my variable cost?
Then each sale increases your loss and there is no break-even point, however much you sell. The calculator flags this. You need to raise the price or lower the variable cost.
What is the margin of safety?
It is how far your expected sales are above break-even, in units or as a percentage of expected sales. A bigger margin of safety means sales can fall further before you make a loss.
Should I include GST or VAT in the price?
No. Use prices and costs excluding GST, VAT or sales tax, because that tax is passed on to the government and is not income. Remove it first with the GST calculator.