Break-Even Calculator
Enter your costs and price — the number of sales you need to cover everything updates as you type.
How this calculator works
Every unit you sell contributes its price minus its variable cost — the contribution margin — toward your fixed costs. Break-even units = fixed costs ÷ contribution margin, rounded up because you can't sell a fraction of a unit. Break-even revenue is simply those units times the price. If the margin is zero or negative, no volume of sales can ever cover the fixed costs — the calculator flags that state instead of showing a misleading number.
Worked example
A candle business has $5,000 in monthly fixed costs, sells at $25, and spends $15 per candle on wax, jars, and shipping. The contribution margin is $10, so break-even is 5,000 ÷ 10 = 500 candles a month, or $12,500 in revenue. Candle number 501 is the first one that earns a profit. Nudge the price to $27 and required volume drops to 417 — the tool makes those what-ifs instant.
Frequently asked questions
What counts as a fixed cost versus a variable cost?
Fixed costs stay the same whether you sell 10 units or 1,000: rent, insurance, software subscriptions, salaried staff, loan payments. Variable costs scale with each unit sold: materials, packaging, payment-processing fees, shipping, per-unit labor. Some costs are mixed — a utility bill with a base charge plus usage — and you can split those between the two buckets.
What is contribution margin?
It's what each sale contributes toward covering fixed costs: selling price minus variable cost per unit. Sell at $25 with $15 of variable cost and every unit contributes $10. Until those contributions add up to your fixed costs, you're losing money; after that point, each unit's contribution is profit before taxes.
How can I lower my break-even point?
You have exactly three levers: raise the price (bigger margin per unit, though it may cost you some sales), cut variable costs (cheaper materials, better supplier terms, lower processing fees), or cut fixed costs (smaller space, leaner subscriptions). Small changes compound — a $1 improvement in margin on a $10-margin product cuts required units by about 9%.
Should my own salary be in the numbers?
Only if you put it there — the formula has no opinion. If you need to pay yourself $3,000 a month, add it to fixed costs and the break-even point becomes the sales level where the business supports you, not just itself. Leaving your pay out gives a lower, more flattering number that hides the real hurdle.