Pricing & profit tools · 03

Break-Even Calculator

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Free tool - no sign-up - runs in your browser

Work out how many sales cover your fixed costs and marketing, how many reach a profit target, and how far your sales can fall before you stop making money.

Break-even calculator

Filled with example values. Replace them with your own.

Currency and period

A product, an hour, a job, a seat... every result uses this word.

Price and variable costs

What the customer pays for one unit, before any discount.

Everything one more sale costs you: product cost, materials, direct labour.

Per unit: packaging, shipping you pay, commissions. Not fixed overheads.

Fixed costs and marketing

Rent, salaries, software, insurance - costs that do not change with each sale.

Advertising for the same period.

Targets

Optional. How much profit you want left for the period.

Optional. Used for profit and your margin of safety.

Fees, VAT and discounts

Card processing or marketplace commission, as a % of the price after discount.

Tax collected for the government is not your revenue, so it is removed before any margin is calculated.

Planned average discount off the selling price.

Break-even sales / month

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Break-even revenue
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Contribution per unit
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Contribution margin
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Sales for your target profit
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Modeled operating profit
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Margin of safety
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Revenue, costs and profit by sales volume

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    How to use it

    1. Enter your selling price and what each unit costs you to sell: product cost plus any other per-unit costs and fees.
    2. Enter fixed operating costs and marketing spend for the period you are planning - a month is common. Keep every per-period number on the same period.
    3. Optionally enter a profit target and the units you expect to sell to see target sales and your margin of safety.
    4. Read the chart: break-even is where the revenue line crosses the total cost line, and where the profit line crosses zero.

    The formulas

    Break-even comes from the contribution of each sale: what is left of the price after the costs that come with that sale.

    • Contribution per unit = price you keep - variable costs per unit - fees per unit
    • Break-even units = (fixed costs + marketing) / contribution per unit, rounded up
    • Break-even revenue = break-even units x price you keep
    • Units for a target profit = (fixed costs + marketing + target profit) / contribution per unit, rounded up
    • Margin of safety = (expected units - break-even units) / expected units

    Units are rounded up because you cannot sell part of one. If contribution per unit is zero or negative, there is no break-even point: under constant costs each extra sale adds nothing or loses money, so more volume cannot help. The calculator tells you instead of printing a number.

    Worked example

    One product sells for $100 and costs $60 per unit in variable costs. Fixed costs are $20,000 a month.

    • Contribution per unit = $100 - $60 = $40
    • Break-even = $20,000 / $40 = 500 units a month, or $50,000 of revenue.
    • To make $10,000 of operating profit: ($20,000 + $10,000) / $40 = 750 units.
    • Expecting 1,000 units, the margin of safety is (1,000 - 500) / 1,000 = 50%: sales could halve before the month makes a loss.

    Questions

    What counts as a fixed cost and what is variable?

    A variable cost rises with every unit you sell: materials, product cost, packaging, payment fees, sales commission. A fixed cost stays the same within the period whatever you sell: rent, salaries, software, insurance. Some costs are mixed; split them or put them where most of the cost behaves.

    Should my own salary be included?

    If you need to pay yourself, yes - add it to fixed costs. Otherwise break-even only tells you when the business stops losing money, not when it pays you.

    Is break-even the same as having cash in the bank?

    No. Profit is not cash. Stock bought in advance, customers who pay late, loan repayments and tax all move cash without changing this profit figure.

    Why does the calculator round units up?

    Because 499.2 units is not a sale you can make. At 499 units you are still slightly below break-even; at 500 you have covered your costs.

    Assumptions and limits

    • Price and variable cost per unit are constant at every volume.
    • Fixed costs stay fixed within the period and the range of sales you model.
    • One product, or an average unit for a stable product mix.
    • Taxes on profit, debt service and owner withdrawals are not included.

    Sources and method

    Reviewed by The Business Radar editorial team Last reviewed October 2026

    These tools model your own inputs with standard formulas. They are for planning and education, not financial, tax or legal advice.

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