Finance tools
Break-even calculator
Free break-even calculator, break-even point calculator, and breakeven analysis calculator for US small businesses. Enter fixed costs, variable cost per unit, and selling price to find break-even units, break-even revenue, contribution margin ($ and %), optional profit at anticipated sales, margin of safety, and a cost-vs-revenue chart — then export CSV or PDF. Live results, no submit button.
What break-even means
Your break-even point is where total revenue equals total costs — you neither earn a profit nor run at a loss. Below that sales level you lose money; above it, each additional unit contributes profit after covering fixed overhead.
This calculator uses classic unit economics: fixed costs plus per-unit variable costs compared to your selling price. Results are for planning and education, not tax or accounting advice.
Break-even units & revenue
Live contribution margin, whole-unit break-even, and revenue at break-even.
Sales scenario
Optional anticipated unit sales with profit or loss and margin of safety.
Cost vs revenue chart
Visualize fixed + variable cost against revenue as volume grows.
CSV/PDF export
Download inputs and results for Excel models or investor updates.
Related finance tools: burn rate calculator, churn rate calculator, current ratio calculator, and compound interest calculator.
Break-even formula
The standard break-even formula in units is:
Break-even formulas
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit)Break-even revenue = Break-even units × Selling price
The denominator is contribution margin per unit — what each sale contributes toward fixed costs before profit.
You can also express break-even in revenue: Fixed costs ÷ Contribution margin ratio, where the ratio is contribution margin per unit divided by selling price.
This is the same break-even formula taught in accounting and small-business planning:
- Contribution margin per unit = selling price − variable cost (e.g. $45 − $30 = $15).
- Break-even units = fixed costs ÷ contribution margin (round up to whole units).
- Break-even revenue = break-even units × selling price.
Fixed costs vs variable costs
| Cost type | Examples | Break-even role |
|---|---|---|
| Fixed costs | Rent, salaries, insurance, software subscriptions | Must be covered by total contribution margin across all units sold |
| Variable costs | Materials, direct labor per unit, shipping per order | Reduce contribution margin per unit — higher variable cost raises break-even |
Use the same time period for all inputs (e.g. monthly fixed costs with per-unit costs and price for one month of sales). Mixing monthly rent with annual volume will skew results.
Contribution margin
Contribution margin per unit = Selling price − Variable cost per unit. Contribution margin % = Contribution margin ÷ Selling price.
In break-even analysis, contribution margin is the lever that determines how many units you must sell. There is no single “good” margin for every industry — compare your % to direct costs and pricing power. Many product businesses aim for enough margin to cover fixed costs at realistic volume; if margin is thin, break-even units rise quickly.
A higher margin means you need fewer units to cover fixed costs. If price equals variable cost, contribution margin is zero and you cannot break even without raising price or cutting costs.
Margin of safety in break-even analysis
In break-even analysis, margin of safety measures how far your expected sales sit above the break-even point — in units or as a percent of anticipated volume. It answers: “If sales come in below plan, how much cushion do I have before I operate at a loss?”
Margin of safety (units) = Anticipated units − Break-even units. Margin of safety % = (Anticipated units − Break-even units) ÷ Anticipated units × 100.
Open Sales scenario in the calculator to enter anticipated unit sales. Results show profit or loss and margin of safety automatically. (This is unit-economics margin of safety — not investment “margin of safety” from security analysis.)
Worked examples
Example 1: Fixed costs $2,700, selling price $45, variable cost $30 per unit. Contribution margin = $15. Break-even units = 2,700 ÷ 15 = 180 units. Break-even revenue = 180 × $45 = $8,100.
Example 2 (t-shirt shop): Fixed costs $1,000, price $25, variable cost $10. Margin = $15. Break-even = 1,000 ÷ 15 = 67 units (rounded up). Revenue break-even ≈ $1,675.
Open Sales scenario in the calculator to enter anticipated unit sales and see profit or loss plus margin of safety.
Using break-even for pricing
Break-even sets a price floor: below this volume or margin, you operate at a loss. If break-even units exceed realistic demand, raise price, cut variable costs, or reduce fixed overhead before launching.
Model price changes in the calculator — higher price lowers break-even units if variable cost stays flat. For labor-heavy variable costs, see our employee cost calculator.
How to calculate break-even in Excel
To build a break-even calculator in Excel or Google Sheets, set up four cells:
- B1 — fixed costs
- B2 — variable cost per unit
- B3 — selling price per unit
- B4 — break-even units:
=IF(B3>B2, CEILING(B1/(B3-B2),1), "")
Break-even revenue in B5: =B4*B3
Prefer not to build the sheet? Use this calculator, then export CSV — fixed costs, variable cost, price, contribution margin, break-even units, and revenue are included.
Common break-even calculation mistakes
- Mixing time periods — monthly rent with annual unit volume skews break-even units.
- Ignoring semi-variable costs — allocate shipping, commissions, or overtime to a sensible per-unit variable rate.
- Using fractional units — you sell whole units; round break-even up when planning inventory or production.
- Confusing break-even with payback — break-even is volume at zero profit; payback is how long until cumulative cash recovers an investment.
- Expecting trading or mortgage break-even — crypto, forex, options, and mortgage break-even use different inputs; this tool is for product and service unit economics.
Limitations
This tool covers single-product break-even analysis. Multi-product businesses need a weighted contribution margin or per-SKU calculations (planned for a future update).
It does not include time value of money, seasonality, or step-fixed costs. Pair with our burn rate calculator for cash runway — break-even is unit-volume planning, not monthly cash burn. This is not a substitute for a full financial model or professional advice.
How to use this calculator
Enter fixed costs
Total fixed expenses for your analysis period — rent, salaries, insurance, and other costs that do not change with each unit sold.
Enter variable cost and selling price per unit
Per-unit cost to produce or deliver and the price you charge. Results update live — no submit button.
Review break-even units, revenue, and chart
See contribution margin, optional anticipated sales for profit and margin of safety, then export CSV or PDF if needed.
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Frequently asked questions about this break-even calculator
What is a break-even point calculator?
A break-even point calculator finds the minimum units or revenue you need to cover all costs. It uses fixed costs, variable cost per unit, and selling price to show when your business stops operating at a loss.
What is the break-even formula?
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit). Break-even revenue = Break-even units × Selling price. The denominator is contribution margin per unit.
What are fixed costs vs variable costs?
Fixed costs stay constant regardless of sales volume (rent, salaries, insurance). Variable costs change with each unit produced or sold (materials, direct labor, shipping per order). Both must be accurate for a reliable break-even calculation.
What is contribution margin and why does it matter?
Contribution margin is selling price minus variable cost per unit. It shows how much each sale contributes toward fixed costs. A higher margin means fewer units needed to break even.
How do I use break-even in pricing strategy?
Break-even defines the minimum viable sales volume at your current price and cost structure. If break-even exceeds realistic demand, raise price, reduce variable costs, or cut fixed costs. Use the calculator to test different price points before you commit.
What if my selling price is below variable cost?
If selling price ≤ variable cost per unit, contribution margin is zero or negative and you cannot break even at any volume. Raise price or lower per-unit costs before relying on the result.
Can I use this for multiple products?
This version is for single-product analysis. For multiple SKUs, calculate break-even per product or use a weighted-average contribution margin across your sales mix — multi-product mode is on the v1.1 roadmap.
How often should I recalculate break-even?
Recalculate when costs, pricing, or volume expectations change — at minimum quarterly. Also run a new analysis before launching a product, changing prices, or taking on new fixed expenses.
What is margin of safety?
Margin of safety is how far your anticipated sales exceed break-even — in units or percent. It measures cushion before you fall into a loss if sales come in below plan.
Is this break-even calculator free?
Yes. This break-even calculator is free with live results, a cost-vs-revenue chart, and optional CSV/PDF export — no sign-up required.
How do I calculate break-even in Excel?
In Excel or Google Sheets: break-even units = fixed costs ÷ (selling price − variable cost per unit). Use CEILING for whole units. Break-even revenue = break-even units × selling price. Or use this calculator and export CSV.
What is the difference between break-even and burn rate?
Break-even is the sales volume where revenue covers costs for a product or service. Burn rate is how fast a company spends cash each month (startup runway). Use break-even for pricing and unit economics; use a burn rate calculator for cash runway.
What is the difference between break-even and profit margin?
Break-even finds the minimum units or revenue to cover all costs (zero profit). Profit margin measures profit as a percent of revenue after you are above break-even. Contribution margin per unit is the building block for both.
How do you calculate break-even?
Subtract variable cost per unit from selling price to get contribution margin per unit. Divide fixed costs by that margin to get break-even units (round up). Multiply break-even units by selling price for break-even revenue. This calculator updates all three outputs live as you type.
Is 100% ROI the same as breaking even?
No. Break-even is when total revenue equals total costs (zero profit). 100% ROI typically means you doubled your money on an investment — that is well above break-even. Do not use ROI % as a shortcut for break-even volume.
What happens if my fixed costs increase?
Higher fixed costs raise your break-even point — you must sell more units at the same price and variable cost to cover overhead. Lowering fixed costs (or raising price / cutting variable cost) reduces break-even units.
How does a change in variable costs affect break-even?
Lower variable cost per unit increases contribution margin, which lowers break-even units. Higher variable costs shrink margin and push break-even higher. Negotiating supplier rates or improving efficiency are common ways to improve margin.
What is a good contribution margin?
There is no universal “good” contribution margin — it depends on industry, competition, and fixed-cost structure. What matters for break-even is whether your margin lets you reach break-even volume at realistic sales. Use this calculator to test price and cost changes rather than chasing a single benchmark %.
Is break-even the same as payback period?
No. Break-even is the sales volume where profit is zero. Payback period is how long until cumulative cash inflows recover an upfront investment. Break-even ignores timing of cash; payback focuses on recovery time.