Break-even Calculator

Your break-even point is the sales level at which what you take in exactly covers what you spend. Below it you are losing money, above it you start keeping some. This page answers that question in units and in revenue, and then answers it again for a profit you want to keep on top.

• Contribution margin per unit — what one sale leaves after its own variable cost.
• Contribution margin ratio — what share of the selling price that amount is.
• Break-even units — how many units it takes to recover the fixed costs.
• Break-even revenue — those units valued at your selling price.
• Target-profit units — how many units it takes to recover the fixed costs and keep the target profit as well.
• Target-profit revenue — those units valued at your selling price.

The result is an informational estimate based only on the values you enter. Nothing here works out a tax or a fee for you, no industry average is held in the code, and no price and no profit is recommended or guaranteed.

1. Add up everything that stays the same however much you sell and enter it in Fixed costs — rent, wages, subscriptions and so on.
2. Enter what one unit sells for in Selling price per unit.
3. Add up everything spent again for each unit sold and enter it in Variable cost per unit — materials, packaging and so on.
4. Enter what you want to keep once the fixed costs are recovered in Target profit, or leave it at 0.
5. Select Calculate to see both quantities, both revenue figures and the step-by-step details.
6. Select Reset example to put the opening illustration back, or Clear inputs to empty every field.

Split the two kinds of cost over the same period. If your fixed costs are a month of rent and wages, the answer is how many units that month takes. A month of fixed costs next to a per-unit cost taken from a different period produces a number that means nothing.

The values shown when the page opens are a hypothetical example chosen to show how the calculation works. They are not a real business, not an industry benchmark and not a recommended price.

Contribution margin per unit = selling price per unit − variable cost per unit. It is what one sale contributes towards the fixed costs before any fixed cost is taken off. Every unit you sell chips the same amount off the fixed costs, which is exactly why the fixed costs divided by that amount gives the quantity you need.

The contribution margin ratio is that same amount measured against the price: contribution margin per unit ÷ selling price per unit × 100. It answers “of every 100 that comes in, how much is left to put towards the fixed costs?” Because the denominator is the selling price, and the variable cost is never negative, this ratio cannot exceed 100%.

The contribution margin per unit has to be greater than 0. If the variable cost per unit is the same as or higher than the selling price per unit, every extra sale leaves nothing or loses money, so no quantity ever recovers the fixed costs and there is no break-even point at all. The calculator refuses that combination and says so instead of showing a made-up quantity.

These are the formulas this page uses. Follow them in order and you can check every value by hand.

• Contribution margin per unit = P − V
• Contribution margin ratio (%) = (P − V) ÷ P × 100
• Break-even units = round up (F ÷ (P − V))
• Break-even revenue = break-even units × P
• Target-profit units = round up ((F + T) ÷ (P − V))
• Target-profit revenue = target-profit units × P

• F — fixed costs
• P — selling price per unit
• V — variable cost per unit
• T — target profit

Rounding the quantity up is part of the formula, not a display rounding. Half a unit cannot be sold, so when a division leaves a fraction the quantity is raised to the smallest whole number that still satisfies the condition. Both revenue figures are then worked out from that whole quantity, which is why the break-even revenue is usually a little more than the fixed costs. No other intermediate value is rounded; only the numbers on screen are rounded for display, and a ratio that is not 0 but would round to 0 is written as “less than 0.0001%” rather than a false 0%.

These are the same values the calculator shows when the page opens. They are a hypothetical example, not a real business and not a recommended price, and every step can be checked by hand.

1. Fixed costs 12,000, selling price per unit 40, variable cost per unit 25, target profit 5,000
2. Contribution margin per unit = 40 − 25 = 15
3. Contribution margin ratio = 15 ÷ 40 × 100 = 37.5%
4. Break-even units = round up (12,000 ÷ 15) = round up (800) = 800 units
5. Break-even revenue = 800 × 40 = 32,000
6. Target-profit units = round up ((12,000 + 5,000) ÷ 15) = round up (1,133.33…) = 1,134 units
7. Target-profit revenue = 1,134 × 40 = 45,360

The last two lines are where the rounding up shows. The exact division gives 1,133.33… units, and 1,133 units would fall just short of the target, so the answer is 1,134 — the smallest whole quantity that reaches it. Selling 1,134 units leaves slightly more than the 5,000 target rather than exactly 5,000.

• Fixed costs of 0 are accepted and the break-even units are then exactly 0. With nothing to recover, the break-even revenue is 0 too, and every sale is already contributing. A target profit entered next to fixed costs of 0 still produces a quantity of its own.
• A target profit of 0 is accepted and is the baseline of this calculation. The target-profit units then match the break-even units exactly, and so do the two revenue figures, because the only difference between the two is the target profit added to the fixed costs.
• The selling price per unit must be greater than 0. It is the denominator of the contribution margin ratio, and at a price of 0 no quantity ever recovers the fixed costs. This is the only field that cannot be 0.
• The variable cost per unit may be 0 but must stay below the selling price per unit. At 0 the whole price contributes and the ratio is 100%. At or above the selling price the contribution margin is 0 or negative, so the calculator reports that no break-even point exists rather than showing a quantity.
• Empty fields, letters, negative values and values above the limit are not calculated. The calculator tells you which field is wrong and why, and an empty field is never silently read as 0.
• Some combinations fail even when each field on its own is fine. A contribution margin that is tiny next to very large fixed costs pushes the quantity past the range in which whole units can still be counted exactly, and an amount far larger than the one beside it makes the smaller amount vanish completely in the addition or subtraction. Rather than show a truncated figure, the calculator refuses and points at the field to fix.

The upper limit on the amounts is not a legal, regulatory or industry figure. It is a technical safety limit chosen to catch typing mistakes and keep the arithmetic meaningful.

• Results are informational estimates based only on the values you enter.
• Taxes such as VAT and income tax are not automatically included. No tax rate is guessed or held in the code, and whether your price and costs include tax is your decision.
• Card payment fees, marketplace and platform selling fees, shipping, advertising and any other cost are not automatically included. They only affect the result if you add them into the fixed costs or the variable cost per unit yourself, whichever matches how the cost actually behaves.
• This is a single-product calculation. A real business selling several products at different margins reaches break-even at a point that depends on the mix, which this page does not model.
• Discounts, returns, write-offs, stock losses and costs that change with volume are not included. A bulk discount on materials or a price cut mid-period moves the real answer away from this one.
• If a cost is missing, you have to sell more than this quantity in reality. The calculator cannot know about a cost you did not enter.
• Quantities are rounded up to whole units as part of the formula; no other intermediate value is rounded, and only the numbers on screen are rounded for display.
• This is not accounting, tax or legal advice. No price is recommended and no profit is guaranteed. Your real accounts may follow different rules.
• Your inputs are calculated only in this browser and are never sent to or stored on a server.

This page asks how many units it takes to cover your costs. To look at a single sale instead and see what is actually left once the costs are taken off, the Margin Calculator takes a selling price, a purchase cost and the other costs you enter yourself. Its profit per sale is the closest relative of the contribution margin per unit used here.

If you have not settled on a selling price per unit yet, the Markup Calculator starts from a cost and a target markup and decides that price for you. Bring the price it gives back here to see how many units that choice would take.

To ask a similar question about money you put into something rather than units you sell, the ROI Calculator takes an investment cost and an amount recovered and reports the break-even return. Like this page, it applies no tax rate and no fee rate for you and guarantees no return.

• Margin Calculator — what one sale leaves once the costs are taken off
• Markup Calculator — decide the selling price this page asks you for
• ROI Calculator — the same money question asked about an investment