Contribution Margin Calculator

Calculate contribution margin per unit and as a percentage from your selling price and variable costs — plus break-even units when you add fixed costs.

Written and reviewed by the CalcBundle editorial team. Transparent formulas · results are estimates, not advice.

Contribution margin

Enter a selling price greater than zero.

What is a contribution margin calculator?

Contribution margin is how much of each sale is left after variable costs to “contribute” toward fixed costs and profit. It is the engine behind break-even analysis and advertising targets, because it tells you what every additional sale is really worth.

The formulas

Contribution margin / unit = Selling price − variable cost per unit
Contribution margin % = CM per unit ÷ selling price × 100
Break-even units = Fixed costs ÷ CM per unit (when fixed costs are entered)

Contribution margin vs gross margin

Gross margin nets off only the cost of goods. Contribution margin nets off all variable costs — shipping, payment processing, marketplace fees and more — so it is the better basis for deciding whether one more sale, or one more ad click, is worth it. It directly sets your break-even ROAS.

Example

A $100 product with $60 of variable costs has a $40 contribution margin (40%). With $4,000 of monthly fixed costs, you break even at 100 units.

Related calculators

Plan volume with the break-even calculator, set ad targets with the break-even ROAS calculator, and price for profit with the product pricing calculator or the e-commerce profit calculator.

Frequently asked questions

What is contribution margin?

Contribution margin is the money left from each sale after variable costs, available to cover fixed costs and then profit. Per unit it is selling price minus variable cost per unit.

What is the difference between contribution margin and gross margin?

Gross margin subtracts only the cost of goods sold. Contribution margin subtracts all variable costs — including shipping, payment and marketplace fees — so it is usually lower and more useful for break-even and advertising decisions.

How does contribution margin affect break-even?

Break-even units = fixed costs ÷ contribution margin per unit. A higher contribution margin means you break even at fewer units and profit accelerates faster after that point.

How do I calculate contribution margin percentage?

Contribution margin % = contribution margin per unit ÷ selling price × 100. A $40 contribution on a $100 price is a 40% contribution margin.

Break-Even

Find the units and revenue you need to cover costs and reach a target profit.

Break-Even ROAS

Find the minimum ROAS that covers your costs, from your contribution margin.

Product Pricing

Find a profitable selling price from costs, fees, ads and target margin.

E-commerce Profit

Calculate net profit, margin, break-even price and maximum ad spend for a product.

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. Results are estimates based on the costs entered.