Break-Even Calculator
Work out how many units you need to sell to cover your costs — and see which of your three levers, price, variable cost or fixed cost, actually moves that number.
- Updated Aug 17, 2026
- Reviewed by the BSF CPA Editorial Team
- US small business
- 9 min read
Break-even units = fixed costs ÷ contribution margin per unit. With $50,000 of fixed costs, a $25 price and $15 of variable cost, each sale contributes $10 — so you break even at 5,000 units, or $125,000 of revenue. Raise the price to $30 and break-even falls to 3,334 units; cut it to $20 and it doubles to 10,000.
Enter your fixed costs for the period, your selling price and variable cost per unit, and optionally a target profit.
Break-even is the moment your business stops losing money — when total revenue equals total costs. Knowing this number is non-negotiable for any founder, freelancer, or product manager. Below break-even, every sale loses money. Above it, every sale is pure profit. This calculator finds the exact unit count and revenue you need.
Break-even Calculator
Find the exact units and revenue you need to cover all costs — and what it takes to hit your profit target.
Break-even Analysis
How to read your results
| Output | What it means | Why it matters |
|---|---|---|
| Break-even units | Units to sell before you make a cent of profit | The number to test against realistic demand. |
| Break-even revenue | Sales dollars at that volume | Easier to sanity-check against market size. |
| Contribution margin | Price − variable cost, per unit | What each sale contributes to fixed costs. |
| Contribution margin % | That margin as a share of price | Comparable across products and against competitors. |
| Units for target profit | Volume needed to hit your profit goal | Turns an aspiration into a sales quota. |
Price and variable cost move in $0.50 steps, and fixed cost and target in $100 steps. If your price is $24.99, the field will hold $25.00 — close enough for planning, but not exact.
Units are rounded up. You cannot sell 666.7 units, so 666.7 becomes 667. Break-even revenue is computed from the unrounded figure, so it will not always equal units × price exactly.
What break-even really tells you
Break-even is not a target — it is a floor. It answers one question: at what volume do the lights stay on? Everything below it is a loss, everything above it earns the contribution margin on each additional unit.
The concept turns on splitting costs in two. Fixed costs do not move with volume: rent, salaries, insurance, software. Variable costs move directly with each unit sold: materials, packaging, payment processing, shipping, hourly labour tied to output. Contribution margin is what is left of the price after variable costs, and it is the only money available to cover fixed costs.
The most useful thing about running the number is the reality check. If break-even is 5,000 units a month and your best month has been 1,800, the problem is not marketing — the model does not work at that price and cost structure.
The formula
CM % = contribution margin ÷ price
break-even units = fixed costs ÷ contribution margin
break-even revenue = fixed costs ÷ CM %
units for target = (fixed costs + target profit) ÷ contribution margin
- fixed Costs for the period that do not vary with volume.
- price Selling price per unit, net of discounts.
- var Cost per unit that scales with each sale.
- CM Contribution margin — the engine of the whole calculation.
If variable cost equals or exceeds price, contribution margin is zero or negative and the calculator returns zeros. That is correct: no volume of sales can cover fixed costs when each unit loses money. You cannot make it up on volume.
Three worked examples
$8,000 monthly fixed costs, $5.00 price, $1.50 variable cost
Contribution margin is $3.50 a cup, a 70% margin. Break-even is 2,286 cups a month, or $11,429 of revenue — about 76 cups a day on a seven-day week. That is a concrete, testable number: count your cups for a week and you know whether the shop works.
$120,000 fixed costs, $199.50 price, $74.50 variable cost, $60,000 target profit
Contribution margin is $125.00 per customer (62.7%). Break-even is 960 customers and $191,520 of revenue. To clear $60,000 of profit you need 1,440 customers — 50% more than break-even, because every dollar of profit has to come out of that same $125 margin.
$50,000 fixed costs, $25.00 price, $15.00 variable cost
Contribution margin is $10.00 (40%), so break-even is 5,000 units and $125,000 of revenue. Note how much harder a 40% margin works than the coffee shop's 70%: the same fixed costs require far more volume when each sale contributes less.
Which lever moves it most
Three things change break-even: price, variable cost and fixed cost. They are not equally powerful, and the effect of price is not symmetrical.
| Price | Contribution margin | CM % | Break-even units | vs $25 base |
|---|---|---|---|---|
| $20.00 | $5.00 | 25.0% | 10,000 | +100% |
| $22.50 | $7.50 | 33.3% | 6,667 | +33% |
| $25.00 | $10.00 | 40.0% | 5,000 | — |
| $27.50 | $12.50 | 45.5% | 4,000 | −20% |
| $30.00 | $15.00 | 50.0% | 3,334 | −33% |
$50,000 fixed costs, $15.00 variable cost throughout.
A 20% price rise ($25 → $30) cuts break-even by 33%. A 20% price cut ($25 → $20) doubles it. The asymmetry is because price changes hit contribution margin dollar-for-dollar while the denominator is already small: $5 off a $10 margin removes half of it.
This is the arithmetic behind "never compete on price with a thin margin". A discount that looks modest against the price is enormous against the margin.
Fixed costs, by contrast, move break-even in a straight line. At the same $10 margin, every $10,000 of fixed cost adds exactly 1,000 units: $30,000 needs 3,000 units, $50,000 needs 5,000, $75,000 needs 7,500. Useful to know before signing a lease.
Why variable cost creep hurts
Variable costs rarely jump — they drift. Materials up a little, shipping up a little, a payment processor raising its rate. Each looks immaterial against the price. Against the margin, they are not:
| Variable cost | Change vs $15 | Contribution margin | Break-even units |
|---|---|---|---|
| $13.00 | −13% | $12.00 | 4,167 |
| $15.00 | — | $10.00 | 5,000 |
| $16.00 | +7% | $9.00 | 5,556 |
| $17.00 | +13% | $8.00 | 6,250 |
A 13% rise in variable cost raises break-even by 25% — 1,250 extra units on the same fixed costs. Because contribution margin is a difference between two larger numbers, small moves in either are amplified. Re-run this whenever a supplier raises prices.
Adding a profit target
Break-even is survival; the target field tells you what winning requires. Add your desired profit to fixed costs and divide by the same margin.
In Example 2, break-even was 960 customers. A $60,000 profit target needs 1,440 — the extra 480 customers each contributing $125. Note what this exposes: at a 62.7% margin, $60,000 of profit requires $95,760 of additional revenue. Profit targets are always larger in revenue terms than they look, and the thinner the margin the worse the ratio.
Common mistakes
Misclassifying costs
Salaried staff are fixed; hourly staff scheduled to demand are variable. Getting this wrong distorts everything downstream.
Forgetting payment processing
Card fees of 2.9% plus 30¢ are variable costs. On a $25 sale that is about $1.03 straight off your margin.
Using list price, not net
Discounts, promotions and returns all reduce realised price. Use what you actually collect per unit.
Ignoring your own salary
If the business must pay you to survive, your pay is a fixed cost. Leaving it out produces a break-even you cannot actually live on.
Averaging wildly different products
A single price and cost assumes one product or a stable mix. If your mix shifts, break-even moves even when nothing else changes.
Treating break-even as a goal
It is the floor. A business that reliably breaks even returns nothing on the capital and effort invested in it.
Best practices
Sanity-check against real demand
Convert the number to a daily figure. "2,286 cups a month" becomes "76 a day" — far easier to judge as achievable or not.
Protect contribution margin first
Margin is the denominator of the whole calculation. A point of margin is worth more than a point of revenue almost every time.
Re-run it when any input moves
Supplier increase, rent review, price change, new processing rate — each shifts break-even, often more than expected.
Model a downside case
Run it at a 10% lower price and 10% higher variable cost. If break-even is still reachable, the plan has genuine margin for error.
Frequently asked questions
What is contribution margin?
Price minus variable cost per unit — the amount each sale contributes toward fixed costs and, after break-even, to profit. It is the single most important number in the calculation.
Which costs are fixed and which are variable?
Fixed costs do not change with volume: rent, salaries, insurance, software subscriptions. Variable costs scale with each unit: materials, packaging, shipping, payment processing, hourly labour tied to output.
What if my variable cost is higher than my price?
Contribution margin is negative and there is no break-even at any volume — every sale increases the loss. The calculator returns zeros. Raise the price or cut unit costs; volume cannot fix it.
Does this work for a service business?
Yes. Treat a billable hour, project or client as your unit. Variable cost is what delivering one more costs you — contractor time, materials, travel.
How do I handle multiple products?
Use a weighted average price and variable cost based on your typical sales mix. It is an approximation: if the mix shifts toward lower-margin items, real break-even rises even though nothing you entered changed.
Should my own salary be a fixed cost?
If the business has to pay you for it to be viable, yes. Excluding it produces a break-even that keeps the company alive but not you, which is rarely the question you are actually asking.
Why are units rounded up?
Because part-units are not sellable. At 666.7 units you are still fractionally short, so the calculator shows 667. Break-even revenue uses the unrounded figure, so units × price may differ by a few dollars.
What period should I use?
Whatever matches your fixed costs. Enter monthly fixed costs and you get monthly break-even; enter annual and you get annual. Monthly is usually more actionable.
Is a higher contribution margin always better?
Generally, but not in isolation. A 70% margin on a product nobody buys beats nothing. Margin matters most alongside a realistic view of the volume your market will actually support.
How does this relate to gross margin?
They are close but not identical. Gross margin uses cost of goods sold, which may include some fixed production costs. Contribution margin uses only genuinely variable costs, which is what break-even analysis requires.
Why does the price field jump in 50-cent steps?
The input is set to $0.50 increments, so $24.99 becomes $25.00. The effect on the result is minor at planning level, but treat the output as an estimate rather than an exact figure.
What is margin of safety?
The gap between current sales and break-even, usually as a percentage. Selling 6,500 units against a 5,000 break-even gives a 23% margin of safety — sales could fall by that much before you hit a loss.
Methodology & sources
Break-even units are fixed costs divided by contribution margin per unit, rounded up to the next whole unit. Break-even revenue is fixed costs divided by the contribution margin ratio, so it is computed from unrounded units. Target volume adds the profit goal to fixed costs before dividing. Where variable cost is greater than or equal to price, contribution margin is not positive and all outputs return zero. The model assumes a single product or stable sales mix, costs that behave linearly across the relevant volume range, and fixed costs that remain fixed within it. Price and variable cost inputs accept $0.50 increments.
- Standard cost-volume-profit analysis as applied in US managerial accounting practice.
- US Small Business Administration — break-even analysis guidance for business planning.
- All figures independently modelled and verified against the live calculator.
Related resources
- Markup CalculatorSet a price from your cost
- Profit Margin CalculatorMargin, markup and profit per unit
- Cash Flow CalculatorBreak-even does not mean cash-positive
- Working Capital CalculatorWhether you can fund the volume
- Payback Period CalculatorWhen an investment repays itself
- All CalculatorsThe full BSF library
Turn the number into a daily target
Divide your break-even by the days you trade. A monthly figure is abstract; a daily one tells you immediately whether the plan is realistic.
Goes deeper on this
13-Week Cash Flow Forecast (Excel)
The rolling quarter-ahead forecast lenders ask for and owners actually use. It flags the week you run short, not the week after.
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