Business Break-Even Calculator
Calculate your break-even point in units and monthly revenue. Enter your fixed costs, variable cost per unit, and selling price to find exactly how many sales you need to cover all costs. Optionally enter your current sales volume to see your current monthly profit or loss. Everything runs privately in your browser.
What is Break-Even Analysis?
Break-even analysis is a fundamental business planning tool that answers a critical question: how many units do I need to sell before my business stops losing money? The break-even point (BEP) is the exact sales volume where your total revenue equals your total costs — you have covered every fixed expense and every variable production cost, leaving zero profit and zero loss. Every unit sold beyond break-even generates pure profit contribution. Every unit sold below it means you are operating at a loss.
For small businesses and freelancers, break-even analysis is especially valuable because it makes financial risk visible and concrete. Instead of working from gut feel, you know the exact monthly sales target that keeps the lights on. This lets you assess whether your pricing is viable, whether your cost structure is sustainable, and how much buffer you have between your typical sales volume and disaster. It is also useful when evaluating whether to take on a new product line, open a new location, or hire additional staff — all of which increase fixed costs and raise the break-even threshold.
Break-even analysis works for any business model: physical product manufacturers, service businesses, e-commerce sellers, and subscription companies can all use the same underlying formula. For service businesses where you sell time rather than units, define one "unit" as one hour of billable time or one client engagement to make the formula work.
Understanding Contribution Margin
Contribution margin is the heart of break-even analysis. It is the amount left from each sale after you subtract the variable costs associated with producing or delivering that unit. If you sell a product for $30 and it costs $15 in materials, labour, and direct delivery costs, your contribution margin is $15 per unit. This $15 goes first toward covering your fixed costs, and once all fixed costs are covered, every additional $15 flows directly to profit.
Contribution margin ratio — contribution margin as a percentage of selling price — tells you how efficiently your pricing covers overhead. A 50% contribution margin ratio means half of every dollar of revenue is available to cover fixed costs and profit. Higher is better: a 70% ratio means you reach break-even faster and keep more of every incremental sale. Low-margin businesses (often retail or highly competitive markets) need much higher sales volumes to break even than high-margin service businesses with the same fixed cost base.
Understanding your contribution margin also helps you prioritise products. If you sell multiple products, the one with the highest contribution margin (not necessarily the highest price) is most valuable to your profitability. Increasing sales of your highest-margin products is almost always more effective than simply selling more of everything.
How to Use This Break-Even Calculator
Enter your total monthly fixed costs in the first field. Fixed costs are expenses that stay the same regardless of how many units you sell — rent, salaries, insurance, software subscriptions, loan repayments, and utilities. Be thorough: underestimating fixed costs is the most common source of error in break-even calculations for new businesses.
Variable cost per unit is what it costs you to produce or deliver one additional unit — raw materials, packaging, direct labour per unit, shipping, transaction fees, and any other cost that scales directly with production. Selling price per unit is the revenue you receive per unit sold. Do not include taxes collected on behalf of the government (like VAT/GST) in your selling price, as those are not your revenue.
If you enter your current monthly sales volume in the optional fourth field, the calculator will also show your current monthly profit or loss and tell you how many units above or below break-even you currently operate. A positive number means you are profitable by that margin; a negative number shows how many additional sales you need to reach break-even. All calculations happen instantly in your browser with complete privacy.