Break-Even Calculator
How many units to cover your costs
Launching a product or setting a price? Enter your fixed costs, price and per-unit variable cost to find the exact volume where you stop losing money. This break even calculator also tells you what you need to sell to hit a profit target, and how far sales can fall before you are back underwater.
How the break-even point is worked out
Every unit you sell contributes price − variable cost toward your fixed costs. That figure is the contribution margin, and it is the engine of the whole calculation. Divide fixed costs by it and you have the break even point — the volume at which total revenue exactly equals total cost.
At $50 a unit with $20 of variable cost, each sale contributes $30. Against $5,000 of monthly fixed costs that is 167 units a month, or $8,350 of revenue. Unit 168 is the first one that makes you money, and it makes the full $30.
Break-even units are always per whatever period your fixed costs cover. $5,000 of monthly rent gives a monthly break-even; a $12,000 one-off launch budget gives a total. The calculator asks which you entered, because the follow-up question is completely different: "can I sell that many every month?" versus "how many months until I am square?"
Fixed and variable costs, sorted correctly
Fixed costs do not move with volume: rent, salaries, insurance, software subscriptions, accounting. Variable costs scale with each unit: materials, packaging, payment fees, per-order shipping, sales commission.
Sorting them correctly is the whole exercise. Misclassify a large variable cost as fixed and the calculator will tell you each sale contributes more than it does, and your break-even point will be badly optimistic. Two costs are commonly filed wrong:
- Payment processing is variable, not overhead. Roughly 2.9% + $0.30 per transaction moves with every sale.
- Part-time or contract labour tied to output is variable, even though it feels like payroll. Salaried staff who work the same hours whatever you sell are fixed.
How price changes the break-even volume
Price is the most powerful lever here, and the relationship is not linear. Because the price rise falls entirely into the contribution margin, a modest increase collapses the volume you need.
| Price per unit | Contribution | Contribution margin | Units to break even | Revenue to break even |
|---|---|---|---|---|
| $25 | $5 | 20% | 1,000 | $25,000 |
| $30 | $10 | 33.3% | 500 | $15,000 |
| $40 | $20 | 50% | 250 | $10,000 |
| $50 | $30 | 60% | 167 | $8,350 |
| $60 | $40 | 66.7% | 125 | $7,500 |
| $75 | $55 | 73.3% | 91 | $6,825 |
| $100 | $80 | 80% | 63 | $6,300 |
$5,000 of monthly fixed costs, $20 variable cost per unit.
Raising the price from $40 to $50 — a 25% increase — cuts the break-even volume by a third, from 250 units to 167. Going the other way is just as brutal: dropping from $30 to $25 doubles the units you need, from 500 to 1,000. This is why a discount strategy needs a volume plan attached to it, and usually does not survive contact with one.
Break-even analysis beyond the break-even point
Covering costs is a floor, not a plan. Two optional inputs turn the tool into a proper break even analysis:
- A profit target. The units needed are (fixed costs + target) ÷ contribution. On the example above, clearing $3,000 of monthly profit takes 267 units — 100 more than break-even, because each one only brings $30.
- Expected monthly sales. Enter what you realistically expect and the calculator returns your margin of safety: at 250 units a month against a 167-unit break-even, sales can fall 33.2% before you start losing money, and you clear $2,500 a month at plan.
A margin of safety under about 20% is uncomfortable — one bad quarter, one lost customer or one seasonal dip and you are underwater. That is a signal to raise price or cut fixed costs, not to hope for volume.
When there is no break-even point at all
If your price is below your variable cost, the contribution margin is negative and no volume saves you: every additional sale increases the loss. The calculator says so in words rather than returning a number, because a figure there would imply a target that does not exist.
This sounds like something nobody would do, and yet it happens constantly — usually after a marketplace fee rise, a shipping increase or a promotional price that was set against an old cost sheet. Anyone selling on a platform that takes a percentage should re-run the numbers whenever that percentage changes.
What this calculation deliberately ignores
Break-even is a single-product, single-price model, and it assumes both cost lines stay flat across the volume range. Reality bends it in three ways: bulk discounts lower variable cost as you grow, fixed costs step up in lumps when you need another employee or a bigger unit, and a product mix means your blended contribution margin shifts with what actually sells.
None of that makes the number useless — it makes it a starting point. Run it per product, re-run it whenever a cost moves, and treat a break-even that needs more volume than your market plausibly supports as the answer to the question you were really asking.
A planning estimate, not accounting advice. Use your own verified cost figures.
How this break-even calculator works out its numbers
Contribution margin is price − variable cost. Break-even units are fixed costs ÷ contribution margin, rounded up to a whole unit; break-even revenue is those units × price. Units for a profit target are (fixed costs + target) ÷ contribution margin.
- Units are rounded up, never down. You cannot sell 166.7 items, and 166 leaves you short of covering costs, so the calculator reports 167. Break-even revenue is computed from the rounded figure, which is why it can sit slightly above fixed costs ÷ contribution margin ratio.
- The fixed-cost period is an input, not an assumption. Monthly fixed costs produce a monthly break-even and a margin of safety; a one-off total produces a cumulative break-even and a months-to-recoup figure. Mixing a monthly break-even with an annual sales figure inflates the margin of safety twelvefold, so the two are never shown together.
- Margin of safety is (expected units − break-even units) ÷ expected units, compared over the same period.
- A negative contribution margin returns no number. There is no volume at which a below-cost price breaks even, so the calculator says so rather than printing a misleading zero.
- Costs are assumed flat across the volume range. Real bulk discounts, stepped fixed costs and product mix all bend the line; re-run the figures per product when any cost moves.
Reviewed September 2026.
Figures reviewed . Every worked example on this page is checked against the calculator above.
Break-Even Calculator: frequently asked questions
What is the break-even point?
The volume at which total revenue equals total cost — no profit, no loss. Below it you are funding the gap yourself; above it, every unit adds its full contribution margin to profit.
What is the break-even formula?
Fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin. At $5,000 fixed, $50 price and $20 variable cost, that is 5,000 ÷ 30 = 167 units.
What is contribution margin?
The selling price of a unit minus its variable cost — what each sale contributes toward fixed costs and then to profit. It can also be read as a percentage of the price: $30 on a $50 item is a 60% contribution margin.
Are my break-even units per month or in total?
Whatever period your fixed costs cover. Enter monthly rent and salaries and the answer is units per month; enter a one-off launch budget and it is a total. The calculator asks so it can give you the right follow-up figure.
How do I lower my break-even point?
Raise the price, cut the variable cost per unit, or reduce fixed costs. Price is usually the strongest lever — going from $40 to $50 on a $20 variable cost cuts break-even from 250 units to 167.
What is a margin of safety?
How far sales can fall from expected before you hit break-even. Selling 250 units a month against a 167-unit break-even is a 33.2% margin of safety. Under about 20% leaves very little room for a bad month.
How many units do I need to sell to make a specific profit?
Add the profit target to fixed costs, then divide by the contribution margin. Clearing $3,000 profit on $5,000 fixed costs at $30 contribution needs 267 units rather than 167.
What if my price is lower than my variable cost?
Then there is no break-even point at any volume — each sale increases the loss. Raise the price or cut the variable cost; selling more cannot fix a negative contribution margin.