Break-Even Point Calculator
Find how many units you must sell to cover fixed costs, the break-even revenue, units for a target profit and your margin of safety.
The break-even point is the sales volume at which revenue exactly covers all costs, so profit is zero. Below it each period ends in a loss; above it every extra unit adds its contribution margin to profit. Use this calculator to test a price, see how many sales a new product or business needs, or check how much room you have before sales fall into a loss.
How to use this tool
- Enter your fixed costs for the period — a month or a year.
- Enter the selling price and the variable cost of one unit.
- Optionally add a target profit to see the sales needed to reach it.
- Optionally enter expected sales to see the profit and margin of safety at that level.
Formula
Break-even units = Fixed costs ÷ (Price − Variable cost)
Break-even revenue = Fixed costs ÷ Contribution margin ratio
Units for target = (Fixed costs + Target profit) ÷ (Price − Variable cost)
Price − variable cost is the contribution margin: what each sale contributes towards fixed costs. The contribution margin ratio is that amount divided by the price. Margin of safety = (Expected sales − Break-even sales) ÷ Expected sales.
Example
A business with $12,000 of fixed costs a month sells a product for $40 that costs $16 to make and ship. Each sale contributes $24, so it breaks even at 12,000 ÷ 24 = 500 units, or $20,000 of revenue. At 700 units a month the profit is 700 × $24 − $12,000 = $4,800, and sales could drop 28.57% before the business makes a loss.
Frequently asked questions
What counts as a fixed cost?
Costs you pay whether or not you sell anything in the period: rent, base salaries, insurance and subscriptions. For accounting profit, loan principal is not an expense; interest may be. Costs that rise with each unit sold — materials, packaging, shipping, card fees, sales commission — are variable.
Why round the break-even units up?
You cannot sell part of a unit, and selling one unit fewer than the exact figure still leaves a small loss, so the practical target is the next whole number.
How can I lower my break-even point?
Raise the price, cut the variable cost per unit, or reduce fixed costs. Raising the contribution margin usually has the biggest effect because it applies to every unit.
Last updated: 2026-10-30