Break-Even Calculator
Find exactly how many units you need to sell — or how much revenue you need to generate — to cover all your costs.
Calculate Your Break-Even Point
What is a Break-Even Point?
The break-even point is when total revenue equals total costs — you're making zero profit but covering all expenses. Every unit sold beyond break-even is pure profit.
Break-Even Formula
Contribution Margin = Selling Price − Variable Cost per Unit
Break-Even Units = Fixed Costs ÷ Contribution Margin
Break-Even Revenue = Break-Even Units × Selling Price
Fixed vs Variable Costs
Fixed Costs
Don't change with sales volume
- Rent / lease
- Salaries
- Insurance
- Software subscriptions
- Loan payments
Variable Costs
Increase with each unit sold
- Raw materials
- Packaging
- Payment processing fees
- Shipping per order
- Sales commissions
Frequently Asked Questions
What if my contribution margin is zero or negative?
If your selling price is at or below your variable cost per unit, you lose money on every sale regardless of volume — there is no break-even point. You must either raise your price or reduce variable costs.
How do I use break-even analysis for a new product?
Before launching, estimate your fixed costs (what you'll pay regardless of sales) and variable costs per unit. Set a target price and run this calculator. If the break-even unit count is higher than realistic sales volume, the product won't be profitable at that price.
Should I include my own salary in fixed costs?
Yes — if you're a business owner who draws a salary, include it as a fixed cost. This gives you a more realistic picture of what it takes to truly break even, not just cover operational costs.
What is contribution margin ratio?
Contribution margin ratio = contribution margin ÷ selling price. It tells you what percentage of each dollar of revenue contributes to covering fixed costs. A 60% ratio means $0.60 of every $1 goes toward fixed costs and profit.