Break-Even Calculator

The break-even point is where your total revenue exactly equals your total costs — both fixed and variable. At this point you make neither a profit nor a loss. It's expressed as a number of units sold or as a revenue figure. Knowing your break-even point helps you set realistic sales targets, price products, and understand how changes in costs affect profitability.

The formula is: Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit). The difference between selling price and variable cost is called the "contribution margin per unit" — it's how much each sale contributes towards covering your fixed costs. Once you've covered all fixed costs, every additional unit sold generates pure profit at the contribution margin.

Fixed costs stay the same regardless of how many units you sell — rent, salaries, insurance, software subscriptions, loan repayments. Variable costs change with each unit produced or sold — raw materials, packaging, shipping, sales commissions, payment processing fees. Some costs are semi-variable (e.g. electricity) — for break-even analysis, allocate these to whichever category is most accurate.

This varies hugely by industry. Software and digital products can have margins of 80–90% because variable costs are near zero. Retail typically runs 40–60%, while food and manufacturing may be 20–40%. A higher contribution margin means you break even faster with fewer sales. If your margin is very low, you need high volume to cover fixed costs — consider whether your pricing or cost structure needs adjusting.