Break-Even Calculator
Work out how many units and how much revenue you need to break even, with contribution margin, profit targets and margin of safety.
Enter your fixed costs, selling price and variable cost per unit — the break-even point is worked out as you type.
- Break-even point (units)
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- Break-even point (sales)
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- Contribution margin per unit
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- Contribution margin ratio
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Profit target & margin of safety
- Units for target profit
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- Sales for target profit
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- Profit at expected sales
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- Margin of safety
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How it works
This is the standard contribution-margin break-even model used in management accounting.
First it works out the contribution margin per unit — the selling price
minus the variable cost of making or delivering one unit
(CM = price − variable cost). Every unit you sell contributes that amount
towards your fixed costs. The break-even point in units is therefore
fixed costs ÷ contribution margin per unit, and the break-even point in sales
revenue is fixed costs ÷ contribution margin ratio, where the ratio is
CM ÷ price. With fixed costs of 10,000, a price of 25 and a variable cost of 15,
the margin is 10 per unit, so you break even at 1,000 units or 25,000 in sales.
Add a profit target and it solves (fixed costs + target profit) ÷ CM per unit —
1,500 units in that example for a 5,000 profit. Enter the sales you actually expect and it
shows the profit you would make (units × CM − fixed costs) plus your
margin of safety, the percentage by which sales can fall before you start
losing money: (expected − break-even) ÷ expected × 100. Fixed costs are the ones
that do not change with volume (rent, salaries, software, insurance); variable costs are the
ones that do (materials, packaging, shipping, payment fees, commission). Units can only be
sold whole, so round the break-even figure up.
Everything is calculated in your browser with plain JavaScript. Your cost and price figures never leave your device — there is no sign-up, no ads and no data collection.
Frequently asked questions
How do you calculate the break-even point?
Use the contribution-margin method. First find the contribution margin per unit: selling price minus the variable cost of one unit. Then divide your fixed costs for the period by that margin. With 10,000 of fixed costs, a price of 25 and a variable cost of 15, the margin is 10 per unit, so you break even at 10,000 ÷ 10 = 1,000 units. In sales terms, divide fixed costs by the contribution margin ratio (10 ÷ 25 = 40%), which gives 10,000 ÷ 0.40 = 25,000 in revenue.
What counts as a fixed cost and what counts as a variable cost?
Fixed costs stay the same however much you sell: rent, salaries, insurance, software subscriptions, accounting fees, loan interest. Variable costs change with each unit sold: raw materials, manufacturing labour paid per item, packaging, shipping, payment-processing fees and sales commission. Put a cost in the variable box only if selling one more unit makes it go up. Semi-variable costs such as a phone plan with overage are usually split, with the standing charge treated as fixed.
What is the margin of safety and how much do I need?
The margin of safety is how far sales can fall before you start making a loss: (expected sales − break-even sales) ÷ expected sales × 100. If you break even at 1,000 units and expect to sell 1,500, your margin of safety is 33.33%, or 500 units. There is no universal target, but a thin margin under about 10% means small dips in demand push you into loss, so many small businesses aim for 20% or more, or work to lower fixed costs and raise the contribution margin.