Break-Even Calculator
Work out the sales volume where profit is exactly zero.
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Break-Even Calculator by TheCalcTools
How the Break-Even Calculator works
Enter fixed costs that do not change with volume, such as rent and salaries.
Enter the price and variable cost per unit; their difference is the contribution margin.
Divide fixed costs (plus any profit target) by the contribution margin and round up to whole units.
The formula
Worked example
Using the default values shown in the calculator:
| Fixed costs | $20000 |
|---|---|
| Selling price per unit | $50 |
| Variable cost per unit | $30 |
| Target profit (optional) | $0 |
- Contribution margin = $50 − $30 = $20.00 per unit (40.0% of price).
- Units = $20,000 ÷ $20.00 = 1,000.
- Revenue needed = $50,000.
Result:
| Break-even units | 1,000 |
|---|---|
| Break-even revenue | $50,000 |
| Contribution margin per unit | $20.00 |
| Contribution margin ratio | 40.0% |
Frequently asked questions
What counts as a fixed cost?
Costs that stay the same regardless of volume in the short term: rent, insurance, salaries, software subscriptions.
Why round up?
You cannot sell part of a unit, and selling one unit fewer than the exact figure leaves you slightly below break-even.
How can I lower my break-even point?
Raise the price, cut variable costs or reduce fixed costs. Each one increases the margin of each sale or lowers the hurdle.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.