Break-Even Calculator
Calculate business break-even point
Break-Even Calculator tool
Break-Even Results
Contribution Margin:
$0.00
Break-Even Units:
0
Break-Even Revenue:
$0.00
Break-Even Calculator: key facts
- What it does
- Calculate business break-even point
- Category
- Financial Calculators
- Cost
- Free, with no account, sign-up, or install.
- Your data
- Runs entirely in your browser — the files and text you enter are never uploaded to a server.
- Last reviewed
- . Report an incorrect result.
About the Break-Even Calculator
Before a product can make money, it has to cover its costs — and the break-even point is exactly where that happens. This calculator takes your fixed costs, the variable cost per unit, and the selling price per unit, then tells you how many units you must sell to break even and the revenue that represents.
Founders use it to pressure-test a business idea; product managers use it to set sales targets; anyone pricing a new offering uses it to know the threshold for profitability. It also reports the contribution margin — the profit each unit adds toward fixed costs — and warns you outright when the selling price is below the variable cost, a model that can never break even.
How to use it
- Enter your total fixed costs (rent, salaries, and other costs that do not change with volume).
- Enter the variable cost to produce one unit.
- Enter the selling price per unit.
- Read the contribution margin, the break-even unit count, and the break-even revenue.
- Heed the warning if your selling price is at or below your variable cost.
Contribution margin does the work
Break-even analysis turns on one intermediate figure: the contribution margin, which is what each unit sold leaves over after its own variable cost. That surplus is what pays down the fixed costs, and once the fixed costs are fully covered every further unit's contribution becomes profit.
So the break-even quantity is simply fixed costs divided by contribution per unit, and the tool shows that margin explicitly rather than hiding it inside the result. If the contribution margin is zero or negative the calculation has no answer — selling at or below variable cost means volume can never cover the fixed base, and more sales make the position worse rather than better.
The unit figure will usually come out fractional. Round upward: you cannot sell a third of a unit, and the rounded-down quantity leaves you marginally short of covering costs.
- The defaults — 5,000 of fixed costs, 10 variable cost, 25 selling price — give a 15 contribution margin, 333.33 units, and 8,333.33 of revenue.
- Raising the price to 30 lifts the margin to 20 and drops break-even to 250 units, a quarter fewer for a 20% price rise.
- Holding price but cutting variable cost to 8 gives a 17 margin and 294.12 units — a reminder that supplier negotiation and pricing are levers on the same number.
Why use this version
- It reports contribution margin as its own figure, the key number that determines how quickly sales chip away at fixed costs.
- It actively detects an unprofitable model — selling price at or below variable cost — and warns instead of returning a misleading number.
- It translates the break-even point into both units and revenue, so you get a sales target and a money target together.
- It runs locally with no sign-up, ideal for quick what-if pricing checks.
The assumptions behind the straight lines
This is a single-product, linear model, and each of those words is doing work. It assumes the selling price holds at every volume, when in practice larger orders attract discounts. It assumes variable cost per unit is constant, when materials usually get cheaper in bulk. And it assumes fixed costs stay fixed, when growth eventually forces another member of staff, a bigger unit, or a second machine — each a step change that resets the calculation.
Two practical adjustments. Sort your costs carefully first, since misclassifying a cost moves the answer significantly: fixed costs are those that do not change with volume, such as rent, salaries, insurance and software, while variable costs are incurred per unit, such as materials, packaging, shipping and payment processing fees. And for a business selling several products, run each line separately or work with an averaged contribution margin weighted by expected sales mix.
Break-even is a floor, not a target. It tells you where you stop losing money, not where the business is viable — that requires covering the owner's time and leaving a return as well.
Frequently Asked Questions
What is the break-even point?
It is the sales volume at which total revenue exactly equals total costs, so profit is zero. Below it you lose money; above it you profit. It is found by dividing fixed costs by the contribution margin per unit.
What is contribution margin?
Contribution margin is the selling price minus the variable cost per unit — the amount each sale contributes toward covering fixed costs and, beyond break-even, toward profit. A higher contribution margin means you break even on fewer units.
Why does it say the units are infinite or a loss?
That appears when your selling price is not above your variable cost, so every unit loses money and no quantity can cover fixed costs. The fix is to raise the price or cut the per-unit cost until the contribution margin is positive.
