Break-Even Calculator — Units, Revenue & Pricing for Profit
Fixed costs, unit cost and price give your break-even point, contribution margin, the units needed for a target profit, and the price for a chosen margin.
Contribution margin is price minus variable cost. It is what each sale contributes toward fixed costs and then profit; the break-even point is fixed costs divided by it.
Nothing you enter is sent or stored. Pricing, cost structure and the plan that gets you past break-even are the core of a strategy engagement. See our strategic planning service.
Found a problem, or something that could be better? We read every message and we fix things quickly.
This free break-even calculator tells you how many units you must sell, and how much revenue that is, before a product or service stops losing money: enter monthly fixed costs, the variable cost per unit and the selling price. It also shows the contribution margin each sale makes, the volume needed for a target profit, and, working backwards, the price that would give you the margin you want.
Break-even is the first number any pricing, launch or expansion decision should be tested against, and it is simple enough to compute on a napkin, which is why it so often is not computed at all. The chart shows the idea in one glance: the revenue line and the total cost line cross at the break-even point; everything to the right is profit. The notes below cover the traps, chiefly costs that are not as fixed or as variable as they look.
How to use
- Enter your fixed costs for a month: the costs you pay whether you sell one unit or a thousand (rent, salaries, software, insurance).
- Enter the variable cost of one unit: what each additional sale costs you (materials, shipping, payment fees, per-unit labour).
- Enter the selling price per unit. The break-even units, revenue and contribution margin update live.
- Add a target monthly profit to see the volume that delivers it.
- Use the pricing helper to find the price that gives a chosen contribution margin, then sanity-check it against what customers will pay.
Frequently asked questions
What is the break-even formula?
Break-even units = fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin per unit. Break-even revenue = break-even units × price, or fixed costs ÷ contribution margin ratio. If price is at or below variable cost there is no break-even point: every sale loses money.
What counts as a fixed cost versus a variable cost?
Fixed costs do not change with volume in the short run: rent, salaried staff, software subscriptions, insurance, loan payments. Variable costs scale with each unit: materials, packaging, shipping, payment processing, commission, hourly labour tied to production. Some costs are stepped (a second delivery van at a certain volume); treat them as fixed within the range you are planning for.
Can I use this for a service business?
Yes. Make the unit a billable hour, a project or a client month. Variable cost is then the direct cost of delivering one unit (subcontractors, per-client software, materials), and fixed costs are everything else. For a solo consultant the break-even in hours is a useful number: it is the minimum billable hours before the month is yours.
What is a good contribution margin?
It depends on the business. Software and services often run 70 to 90 percent; retail 30 to 50; food and manufacturing lower. What matters is whether the margin, times realistic volume, covers fixed costs with room to spare. A high margin on a product nobody buys is worth less than a thin margin at scale.
Why does my break-even seem too high?
Usually because fixed costs include the owner's salary (correctly) or because the price is too close to the unit cost. Both are real findings. The fix is one of: raise the price, cut the unit cost, cut fixed costs, or accept a longer runway to volume and fund it. The calculator makes the trade-off visible; it does not make it disappear.
Reading the chart
The red line starts at your fixed costs and rises by the variable cost per unit. The green line starts at zero and rises by the price per unit. Where they cross is break-even. The steeper the green line relative to the red, the higher the contribution margin and the sooner you cross. If the red line is steeper, the lines never cross: the business loses more with every sale.
Beyond break-even
Break-even is a floor, not a plan. Add a target profit to see the volume the business actually needs. Test a price 10 percent higher and see how many fewer units you can sell for the same profit; the answer is usually surprising and is the start of a pricing strategy. And revisit the numbers when fixed costs step up: a hire or a lease changes the whole picture.
Related free tools
- Website Cost Calculator — Pick the type of site and the features you need; see freelancer, agency and DIY price ranges plus monthly running costs. Canadian 2026 figures.
- Invoice Generator — Fill in your details and line items, add tax, and download a clean PDF invoice or quote. No account; your details are remembered in your browser.
- AI ROI Calculator — Estimate how many hours and dollars automating a repetitive task could save your business every year.