Business Break-Even Calculator
Find exactly how many units and how much revenue you need to cover your costs — and what it takes to hit a target profit. See the loss and profit zones on a clear break-even chart.
Written by the CalcBundle Research & Editorial Team · Reviewed by the Quality Review Team · Transparent formulas · results are estimates, not advice. · Updated
Break-even point
Enter a selling price per unit greater than zero.
Quick Answer
What is the break-even point?
The break-even point is the sales volume at which total revenue exactly equals total costs — no profit, no loss. The formula is: Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit). The difference between selling price and variable cost is the contribution margin — the amount each sale contributes toward fixed costs. Once cumulative contribution margins equal fixed costs, the business breaks even. Every unit sold beyond that point is pure profit. For example, a product priced at $100 with $60 in variable costs has a $40 contribution margin. With $4,000 in fixed costs, the business breaks even at 100 units ($10,000 in revenue). Raising the price or cutting variable costs reduces the break-even quantity; raising fixed costs increases it.
What is the break-even point?
The break-even point is the exact sales volume at which total revenue equals total costs, leaving neither profit nor loss. A business below its break-even point is losing money on every period; once it crosses the break-even, every additional unit sold contributes pure profit. The formula is straightforward: Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit). For example, a product priced at $100 with $60 in variable costs and $4,000 in monthly fixed costs breaks even at 100 units or $10,000 in revenue. This calculator is built for business owners, product managers, and founders who need to set minimum sales targets before a new launch, evaluate whether a price change is safe, or understand how thin their margin of safety is before a downturn would push them into loss. It works for any product, service, or subscription model with identifiable fixed and variable costs.
How does the calculator work?
Enter your selling price per unit, your variable cost per unit and your total fixed costs. Optionally add a sales target and a desired profit. The calculator computes your contribution margin, your break-even in units and revenue, and how many units you need to reach your profit goal — then plots the loss zone, break-even point and profit zone on a chart so you can see the full picture at a glance.
The formulas
- Contribution margin per unit = Selling price − Variable cost
- Break-even units = Fixed costs ÷ Contribution margin per unit
- Break-even revenue = Break-even units × Selling price
- Units for desired profit = (Fixed costs + Desired profit) ÷ Contribution margin per unit
Example
You sell a product for $100 with $60 of variable cost, giving a $40 contribution margin (40%). With $4,000 of monthly fixed costs, you break even at 100 units, or $10,000 of revenue. To earn an extra $2,000 of profit you would need to sell 150 units. The chart shades everything below 100 units red (loss) and everything above green (profit).
Why the contribution margin matters
A higher contribution margin means each sale does more work to cover your fixed costs, so you break even sooner and profit accelerates faster once you pass it. Raising prices or reducing per-unit costs both widen the margin. If your margin is thin, small changes in price or cost have an outsized effect on how many units you must sell.
Who should use it?
- New businesses pricing a product or service for the first time.
- Owners deciding whether a price change or promotion is worth it.
- Anyone setting realistic monthly sales targets.
Limitations
The model assumes a constant selling price and variable cost per unit and a fixed cost base that does not change with volume. In reality, bulk discounts, stepped costs and price tiers can shift the point. Use the result as a clear baseline, then sense-check it against your real cost behaviour. Pair it with our business profit calculator to model profit beyond break-even.
Frequently asked questions
What is the break-even point?
The break-even point is the sales volume at which total revenue equals total costs, so profit is exactly zero. Below it you make a loss; above it you make a profit. It is measured in units and in revenue.
How do you calculate break-even units?
Break-even units = Fixed costs ÷ Contribution margin per unit, where contribution margin per unit = Selling price − Variable cost. For example, $4,000 of fixed costs and a $40 contribution margin give a break-even of 100 units.
What is contribution margin?
Contribution margin is the money left from each sale after variable costs, available to cover fixed costs and then profit. It can be expressed per unit (price minus variable cost) or as a percentage of the selling price.
What if my variable cost is higher than my selling price?
Then every sale loses money and there is no break-even point at that price — you would only lose more by selling more. The calculator detects this and asks you to raise your price or lower your variable cost instead of returning a misleading number.
How does raising my price change the break-even point?
A price rise increases your contribution margin per unit, so you break even at fewer units — often a much larger effect than it first appears. If a $100 product with $60 of variable cost breaks even at 100 units, raising the price to $110 lifts the contribution margin from $40 to $50 and drops break-even to 80 units, a 20% reduction from a 10% price increase. Because break-even is so sensitive to margin, pricing is usually the fastest lever for reducing the volume you need to sell.
What is the margin of safety?
The margin of safety is how far your actual or expected sales sit above the break-even point, usually shown as a percentage. If you break even at 100 units and expect to sell 150, your margin of safety is 50% — sales could fall by a third before you start losing money. It is a simple but powerful gauge of risk: a thin margin of safety means the business is fragile to any downturn, while a wide one gives room to absorb shocks.
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Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money.