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About the break-even calculator
The break-even point is where your sales pay for all your costs. Below it you lose money. Above it you make a profit.
Type your fixed costs per month, your price per unit and your variable cost per unit. The tool shows the units to break even, the sales to break even, the contribution per unit and the contribution margin.
Open More options to add the profit you want and the units you expect to sell. A table shows your profit or loss at half, the same and double the break-even units.
Features
- Units and sales to break even — see how many units you must sell each month, and how much money in sales that is
- Contribution per unit — see what each sale leaves after its variable cost, also as a contribution margin in percent
- Profit goal — under More options, type the Profit I want per month to see the units you need for it
- Your own sales level — type the Units I expect to sell per month to see your profit or loss there
- Profit table — revenue and profit at half, 75%, 100%, 125%, 150% and double the break-even units
- 47 currencies — pick your Currency; the choice is remembered and used by the other money tools too
- Copy the result — copy all the numbers, with a link to this page, in one click
- Private and saved — it all works in your browser, nothing is uploaded, and your numbers stay on this device for next time
How to use it
- Type the Fixed costs per month (rent, salaries, software) — costs that stay the same whatever you sell
- Type the Price per unit you sell at
- Type the Variable cost per unit — material, packing, shipping, sales fees
- Open More options for Profit I want per month and Units I expect to sell per month
- Read the table under the result to see profit at other sales levels
The break-even formula
Break-even units = fixed costs ÷ (price − variable cost)
The part in brackets is the contribution per unit: what each sale adds towards your fixed costs.
When you open the page, the tool shows fixed costs of 5,000, a price of 50 and a variable cost of 20:
- Contribution per unit: 50 − 20 = 30
- Contribution margin: 30 ÷ 50 = 60%
- Break-even units: 5,000 ÷ 30 = 166.7, rounded up to 167 units
- Sales to break even: 167 × 50 = 8,350
Profit at other sales levels
The same example (this is the table the tool shows):
| Units sold | Revenue | Profit |
|---|---|---|
| 83 | 4,150 | −2,510 |
| 125 | 6,250 | −1,250 |
| 167 | 8,350 | 10 |
| 208 | 10,400 | 1,240 |
| 250 | 12,500 | 2,500 |
| 333 | 16,650 | 4,990 |
At 167 units the profit is 10, not 0, because you cannot sell part of a unit.
A profit goal
Add your goal to the fixed costs and divide again. For a profit of 3,000 a month:
(5,000 + 3,000) ÷ 30 = 266.7, so you need 267 units.
How the price changes the break-even point
Fixed costs 5,000 and variable cost 20, at different prices:
| Price per unit | Contribution | Units to break even |
|---|---|---|
| 40 | 20 | 250 |
| 45 | 25 | 200 |
| 50 | 30 | 167 |
| 60 | 40 | 125 |
| 70 | 50 | 100 |
A small price rise can cut the units you need by a lot. But a higher price may also mean fewer sales.
Frequently asked questions
How do I calculate the break-even point?
Divide your fixed costs by the price minus the variable cost per unit. With 5,000 fixed costs, a price of 50 and a variable cost of 20, you need 5,000 ÷ 30 = 167 units.
What is the difference between fixed and variable costs?
Fixed costs stay the same each month, like rent, salaries and software. Variable costs grow with each unit you sell, like material and shipping.
What is the contribution margin?
It is the price minus the variable cost, shown as a percent of the price. At 60%, each sale of 50 gives 30 towards fixed costs and profit.
Why does the tool say the price must be higher than the variable cost?
If each unit costs you more than you sell it for, every sale adds to the loss. You can never break even, so raise the price or cut the variable cost.
Can I use it for a service business?
Yes. Use one hour or one job as a "unit". Put your hourly or job price in Price per unit, and the cost of each job in Variable cost per unit.
Is this financial advice?
No. It is a planning tool. Real sales and costs change, so check your plan often.
Good to know
- Works with any currency — choose it at the top
- Your numbers are saved only in this browser
- Nothing you type is sent anywhere
Related tools
- Profit Margin Calculator — margin and markup on each sale
- ROI Calculator — the return on money you put in
- Budget Calculator — plan money in and money out
- Hourly to Salary Calculator — price your time
- Percentage Calculator — any percent question
