Break-Even Point Calculator
This free break-even point calculator tells you exactly how many units you need to sell to stop losing money — plus your break-even revenue, contribution margin, and margin of safety.
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Your results
Enter your costs and price to see your break-even point.
How to use this calculator
Enter your total fixed costs for the period (per month works for most small businesses), your selling price per unit, and your variable cost per unit. The calculator instantly shows your break-even units and break-even revenue.
Optionally, add your expected monthly sales. With that, the tool also computes your margin of safety — how far sales can fall before you start losing money — and roughly how long it will take to reach break-even at that sales rate.
How it works
The math starts with the contribution margin per unit: how much each sale contributes toward fixed costs after its own variable cost is paid.
contribution margin = selling price − variable cost per unit
Break-even units is the fixed cost bill divided by that per-unit contribution:
break-even units = fixed costs ÷ contribution margin
And break-even revenue is simply:
break-even revenue = break-even units × selling price
The model is linear: it assumes the price, the variable cost per unit, and the fixed costs stay the same at every sales volume. That's why the calculator also requires the selling price to exceed the variable cost — otherwise each unit adds to the loss and no break-even point exists.
Note: real businesses often hit step changes (volume discounts, hiring, capacity limits) that bend these straight lines. Treat the results as a planning estimate, not a guarantee.
Frequently asked questions
What is the break-even point?
The break-even point is the number of units you must sell for total revenue to exactly cover total costs (fixed plus variable). Below it you lose money; above it you make a profit. It is usually expressed in units, in sales revenue, or both.
What is the break-even formula?
First compute the contribution margin per unit: selling price minus variable cost per unit. Then divide fixed costs by the contribution margin. The result is break-even units. Multiply that by the selling price to get break-even revenue.
What if my variable cost is higher than my price?
Then you lose money on every unit you sell, so there is no break-even point — the contribution margin is negative and no sales volume can cover your fixed costs. You must raise your price, lower your variable cost, or both before this calculation is meaningful.
Break-even vs payback period — what's the difference?
Break-even analysis asks how many units you must sell per period to stop losing money; it covers ongoing fixed costs. Payback period asks how long it takes for cumulative cash flow to recover an upfront investment. They answer different questions: one is about operating volume, the other about recovering sunk capital.
What are this calculator's limitations?
It assumes price, variable cost per unit, and fixed costs stay constant at every sales volume — a linear model. Real businesses face price discounts at volume, step-fixed costs (e.g. hiring another shift), and product mix changes. Treat the results as a planning starting point, not a guarantee.