Break-Even Point Calculator
Find the sales volume where you stop losing money, and how much further you have to go to hit a profit target.
Your details
Rent, salaries, insurance — costs that do not move with sales
Materials, shipping, payment fees, per-unit labour
Details
This calculator runs entirely on your device. Nothing you enter is uploaded, stored, or sold. How this works
Break even at
1,333 units
$100,000 of revenue a year — about 3.7 units a day
Includes your inputs, the full breakdown, and every row of the table.
Contribution per unit
$45.00
60.0% of the price
Break-even revenue
$100,000
Units for $40,000 profit
2,222
Revenue for that target
$166,667
- Price per unit
- $75.00
- Less variable cost
- − $30.00
- Contribution margin
- $45.00
- Fixed costs a year
- $60,000
- Break-even units
- 1,333
| Units | Revenue | Total cost | Profit |
|---|---|---|---|
| 0 | $0 | $60,000 | -$60,000 |
| 361 | $27,083 | $70,833 | -$43,750 |
| 722 | $54,167 | $81,667 | -$27,500 |
| 1,083 | $81,250 | $92,500 | -$11,250 |
| 1,444 | $108,333 | $103,333 | $5,000 |
| 1,806 | $135,417 | $114,167 | $21,250 |
| 2,167 | $162,500 | $125,000 | $37,500 |
| 2,528 | $189,583 | $135,833 | $53,750 |
What this means
- Every unit contributes $45.00 toward fixed costs. Once 1,333 units have been sold the fixed costs are covered, and from that point each additional unit adds $45.00 straight to profit.
- The contribution margin ratio is 60.0%, so roughly 60% of every extra dollar of revenue becomes profit once you are past break-even. That ratio is also what a discount costs you: cutting the price by 10% here removes about 17% of the contribution on every sale.
- The split between fixed and variable is the part worth getting right. Anything that changes with volume — materials, shipping, card processing, hourly production labour — is variable. Rent, salaried staff, software, and insurance are fixed.
- This is a single-product model. With a mixed product line, run it on a weighted average contribution margin, and remember the answer only holds while the sales mix stays roughly the same.
How the break-even point calculation works
Break-even is the volume at which total revenue equals total cost. Below it the business consumes cash, above it the business generates it, and knowing where the line sits turns pricing and cost decisions from guesses into arithmetic.
The mechanism is contribution margin: the price of a unit minus the cost of producing that specific unit. Contribution is what is left over to pay for the things that exist whether or not you sell anything. Divide the fixed costs by the contribution per unit and you have the number of units needed before the business starts making money rather than spending it.
The most valuable thing this exposes is the leverage in the model. A business with high fixed costs and high contribution margins — software, a restaurant, a gym — is painful below break-even and extremely profitable above it, because almost every marginal dollar drops through. A business with low fixed costs and thin margins breaks even quickly but never earns much per additional sale. Neither is better, but they demand completely different strategies around growth and risk.
It also prices your discounts honestly. If contribution is 60% of the selling price, a 10% discount does not cost 10% of profit — it costs a sixth of the contribution on every unit sold, which usually requires far more volume to make up than people assume when they agree to it.
Frequently asked questions
How do I calculate the break-even point?
Divide fixed costs by the contribution margin per unit, where contribution is the selling price minus the variable cost per unit. With $60,000 of fixed costs, a $75 price, and $30 of variable cost, contribution is $45 and break-even is 1,334 units.
What counts as a fixed cost?
Anything that does not change when you sell one more unit: rent, salaried staff, insurance, software subscriptions, loan payments. Variable costs move with volume — materials, shipping, payment processing, per-unit labour. Costs that are partly both, like a phone plan with overage, are usually split.
What if I sell more than one product?
Use a weighted average contribution margin based on your actual sales mix. The result is only valid while that mix holds, so it is worth rechecking whenever the balance between products shifts. For very different product lines, calculating break-even separately for each is usually more informative.
Why does a small discount hurt so much?
Because the discount comes entirely out of contribution, not out of revenue. If contribution is 40% of the price, a 10% discount removes a quarter of the profit on every unit, and you need to sell a third more units just to stand still. This is why volume-for-discount deals so often fail to pay for themselves.
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Disclaimer. This calculator is provided for general information and educational purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Results are estimates based on the inputs you provide and the assumptions described above. Confirm any figure with a qualified professional before acting on it.