Break-Even Calculator
Find out how many units you need to sell to cover your costs. Enter your fixed costs, selling price and variable cost per unit to see the break-even point in units and revenue, plus your contribution margin.
Frequently Asked Questions
What is the break-even point?
It is the sales level where total revenue exactly covers all fixed and variable costs, so your profit is zero. Sell more than this and you make money; sell less and you make a loss.
What is contribution margin?
Contribution margin is the selling price per unit minus the variable cost per unit. It is the amount each sale contributes toward covering your fixed costs and, once those are covered, toward profit.
What if my price is below variable cost?
Then every sale loses money and you can never break even, no matter how many units you sell. The tool warns you and asks you to raise the price or cut the variable cost.
Understanding the Break-Even Calculator
The Break-Even Calculator tells you how many units you must sell before your business starts making a profit. Enter your total fixed costs, the selling price of one unit, and the variable cost to produce that unit. The tool instantly shows the break-even point in both units and revenue, along with your contribution margin per unit and contribution margin ratio. Add an optional target profit and it also reveals how many units you need to hit that goal. Everything runs in your browser and respects your chosen currency, so it works for any product, service, or pricing scenario you want to test.
How it works
First the calculator finds your contribution margin: the selling price per unit minus the variable cost per unit. This is what each sale contributes toward covering fixed costs. It then divides your total fixed costs by that contribution margin to get the break-even quantity, and multiplies that quantity by the price to get break-even revenue. The contribution margin ratio is the margin divided by price, shown as a percentage. If you enter a target profit, the tool adds it to fixed costs before dividing, giving the units needed for that profit. If the price is at or below the variable cost, the margin is zero or negative and the tool warns you that you can never break even.
Worked example
Suppose your fixed costs are 50,000, you sell each unit for 40, and each unit costs 25 to make. Your contribution margin is 40 − 25 = 15 per unit, a 37.5% ratio. Break-even units = 50,000 ÷ 15 = 3,334 units, which equals about 133,360 in revenue. To earn a 20,000 profit, you would need (50,000 + 20,000) ÷ 15 = 4,667 units.
Tips & common mistakes
- Include every recurring fixed cost — rent, salaries, insurance, software — so your break-even point reflects reality.
- Variable costs should cover only per-unit expenses like materials, packaging, and payment fees that rise with each sale.
- If your price is below your variable cost, raise the price or cut costs — no sales volume will ever make you profitable.
- A higher contribution margin ratio means you break even faster and each extra sale adds more profit.
- Use the target profit field to set a sales goal, not just to survive — plan for the income you actually want.
- Re-run the numbers whenever costs or prices change so your break-even target stays current.
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Reviewed by the TopOpenTools editorial team · Last updated June 2026. These tools provide general estimates for educational purposes only and are not financial, tax, insurance, investment, or medical advice. Verify important decisions with a qualified professional.