Break-Even Point Calculator
Built by Najeeb · last updated August 13, 2026 · checked against our testing process
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How to use this break-even calculator
- Enter your monthly fixed costs: everything you pay even if you sell nothing: rent, salaries, insurance, subscriptions, loan payments.
- Enter your selling price per unit: what one customer pays for one product or service.
- Enter your variable cost per unit: what each sale costs you: materials, shipping, card processing fees, commissions.
- Optionally set a target profit: the calculator shows how many units you need to hit that profit, not just break even.
- Read the results: break-even units, break-even revenue, contribution margin, and a daily sales pace. Everything updates instantly as you type.
What is a break-even point?
Your break-even point is the number of sales at which total revenue exactly covers total costs: you're not losing money, but not making any either. Every sale beyond it contributes pure profit. It's the single most useful number for pricing decisions, launch planning, and knowing whether a business idea is viable before you commit.
The break-even formula, explained
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit)
The bottom half of that formula, price minus variable cost, is your contribution margin: what each sale "contributes" toward covering fixed costs. If you sell a product for $50 that costs $20 to deliver, each sale contributes $30. With $5,000 in monthly fixed costs, you need 167 sales to break even (5,000 ÷ 30).
Fixed vs. variable costs: get this right
Fixed costs stay the same whether you sell 10 units or 1,000: rent, salaries, insurance, software subscriptions, equipment leases. Variable costs scale with each sale: raw materials, packaging, shipping, payment processing fees, sales commissions. Mixing these up is the most common break-even mistake: labor is fixed if staff are salaried, variable if you pay per job.
How to lower your break-even point
Three levers: raise prices (a 10% price increase often cuts break-even volume by 20–30% because it flows straight into contribution margin), cut variable costs (negotiate materials, switch processors), or cut fixed costs (sublease space, drop unused subscriptions). Run each scenario in the calculator above and watch the units number move.
Industry-specific versions
Margins and cost structures differ wildly by business type, so we built pre-configured versions: coffee shops, restaurants, food trucks, landscaping businesses, and service businesses. Planning a build-out? Pair this with our construction cost estimator, and once you're selling, our free invoice generator handles billing. Volume is only half the question. Once you know how many units you need, what it costs to generate that volume decides whether hitting the number is worth it.
The mistake that makes a break-even number useless
The most common error in break-even analysis is not a formula mistake. It is leaving the owner out of the costs.
If you run the business and take whatever is left at the end of the month, it is tempting to record no salary for yourself. The calculator then reports a break-even point that is genuinely achievable, and hitting it leaves you working full time for nothing. A business that breaks even while paying its owner zero has not broken even. It has quietly reclassified your wages as profit.
The fix is to decide what the job would cost to hire out, and put that figure into fixed costs before reading the result. The break-even number rises, sometimes uncomfortably, and it becomes the number that matters: the point at which the business covers its costs including the person running it.
Two related omissions are worth checking at the same time. Tax on profit is not a cost in this formula but it is a real claim on the money, so a break-even business has no tax problem while a profitable one should be reserving for it. And loan repayments are fixed costs that never appear on a profit and loss statement as such, which is why a business can look profitable and still run out of cash.
What the calculator does not account for
This tool calculates unit-based break-even using contribution margin per unit. It does not model blended margins across a product mix, step-fixed costs that jump at capacity thresholds, or time-to-break-even in months. If your fixed costs increase at 500 units (new equipment, additional staff), your real break-even is higher than the output shown.
Break-even as a pricing sanity check
Run the calculator in reverse: set target units, solve for required price. A 10% price increase on a product with 40% gross margin cuts required volume by roughly 20%. For food service benchmarks, see the restaurant break-even calculator.
What a step-fixed cost actually does to the number
The exclusions above mention step-fixed costs without explaining what they are, and it's worth understanding, because the calculator's single fixed-cost figure quietly assumes that number holds steady across every volume level, which real businesses often outgrow.
A step-fixed cost is one that's flat for a while, then jumps to a new flat level once you cross a capacity line, rather than rising smoothly. A single-location shop's rent stays fixed until you need a second location to handle more volume, at which point fixed costs jump in one step, not gradually. Same with staffing: one person handles order fulfillment up to a point, then you need a second, and payroll steps up all at once rather than creeping there.
This means break-even isn't always one clean number. It can be several, one per step. If 500 units is your current break-even but a new hire kicks in at 600 units to keep up with volume, the real break-even past that hire is higher than the smooth formula suggests, calculated fresh with the new fixed-cost figure. Run the calculator again with the post-jump fixed costs whenever you're planning growth that crosses one of those thresholds, rather than assuming the current number holds all the way up.
Treat this as a starting point. These figures are an estimate to help you plan. Your real numbers depend on your own costs, rates and terms, so check them against your actual books before you price anything on the result.
Frequently Asked Questions
What is the break-even point formula?
Break-even units = Fixed costs ÷ (Selling price per unit − Variable cost per unit). Break-even revenue = break-even units × selling price. This calculator does both automatically.
What is contribution margin?
It's your selling price minus your variable cost per unit: the amount each sale contributes toward covering fixed costs. Once fixed costs are covered, the contribution margin from each additional sale is profit.
What counts as a fixed cost?
Any cost that doesn't change with sales volume: rent, salaried payroll, insurance, software subscriptions, loan payments, equipment leases. If it shows up on your bank statement even in a zero-sales month, it's fixed.
Can I use this for a service business instead of products?
Yes: treat one "unit" as one client, one project, or one billable hour. We also have a dedicated service business break-even calculator with labels and defaults set up for services.
Is my data saved or sent anywhere?
No. The calculator runs entirely in your browser. Nothing you type is uploaded, stored, or tracked.