Break-Even Calculator

Written byOleh Soloninupdated 5 October 2026

Currency

How to calculate

Fixed costs per period

Rent, salaries, phone and internet, depreciation: what you pay whatever the sales.

Price per unit

Variable cost per unit

Stock or materials, packaging, delivery, payment fees: what grows with every unit sold.

Planned or actual sales, units

Advanced options

Target profit for the period

Shows how much you need to sell to earn this much above your costs.

Result

Break-even units

250

Break-even revenue

$250,000.00

Contribution per unit

$400.00

Contribution margin, %

40%

Profit at this volume

$60,000.00

Margin of safety, %

37.5%

Margin of safety in revenue

$150,000.00

Operating leverage

2.67

Working

Contribution per unit: 1,000 − 600 = 400 Break-even: 100,000 ÷ 400 = 250 → 250 units In revenue: 100,000 ÷ 40% = 250,000 Profit at 400 units: 400 × 400 − 100,000 = 60,000 Margin of safety: (400 − 250) ÷ 400 × 100 = 37.5%

Profit at different volumes

     Units         Revenue           Costs          Profit
         0               0         100,000        -100,000
       125         125,000         175,000         -50,000
=      250         250,000         250,000               0
       375         375,000         325,000          50,000
>      400         400,000         340,000          60,000
       500         500,000         400,000         100,000

Break-even at other prices

           Price      Per unit    Break-even
        −20% 800           200           500
        −10% 900           300           334
   current 1,000           400           250
      +10% 1,100           500           200
      +20% 1,200           600           167

This result is informational only and is not professional advice.

How much you need to sell to break even, and what is left at your plan

Break-even point in units and in revenue with the formula worked through, contribution margin, margin of safety, profit at your planned sales, operating leverage and tables of profit by volume and break-even by price.

The break-even point is the sales volume at which revenue covers every cost and profit is zero. Each unit sold brings in its contribution, the price minus its variable cost, and those contributions pay off the fixed costs. Beyond that point each extra unit adds its contribution — the price minus its variable cost — to profit.

The calculator finds break-even in units if you know the price and cost per unit, or in revenue from sales and variable costs for a period. Add your planned sales and it also shows the profit, the margin of safety and the operating leverage.

How to use

Choose units or revenue.
Enter fixed costs for the period, then the price and variable cost per unit, or the revenue and variable costs for the same period.
Enter planned or actual sales to see the profit and margin of safety.
A target profit can be added in the extra settings.
Read the break-even point, the Working lines and the tables by volume and by price.

The break-even formula

In units, break-even = fixed costs ÷ (price − variable cost per unit). In revenue, break-even = fixed costs ÷ contribution margin ratio, where the ratio = (revenue − variable costs) ÷ revenue. Before the units are rounded up they give the same point: units × price = break-even revenue; the whole-unit figure brings in a little more.

Worked out with this calculator.
To find	Formula	Example
Contribution per unit	price − variable cost per unit	1,000 − 600 = 400
Break-even units	fixed costs ÷ contribution per unit	100,000 ÷ 400 = 250 units
Contribution margin ratio	(revenue − variable costs) ÷ revenue	(500,000 − 300,000) ÷ 500,000 = 0.4
Break-even revenue	fixed costs ÷ ratio	100,000 ÷ 0.4 = 250,000
Margin of safety	(planned − break-even) ÷ planned × 100	(400 − 250) ÷ 400 × 100 = 37.5%
Units for a target profit	(fixed costs + target) ÷ contribution per unit	(100,000 + 50,000) ÷ 400 = 375 units

A worked example in units

Fixed costs are 100,000 a month, the product sells for 1,000, and buying and delivering one unit costs 600. Each sale contributes 400, a contribution margin of 40%. Covering 100,000 takes 100,000 ÷ 400 = 250 units, or 250,000 of revenue.

When the division leaves a fraction, round the units up: at a price of 900 break-even is 100,000 ÷ 300 = 333.33, so 334 units. In revenue the point stays exact at 300,000, and the 334th unit already makes a profit of 200.

Break-even in revenue

A shop with hundreds of products, or a service with no units to count, is better off working in revenue. You need revenue and variable costs for the same period, whether a month, a quarter or a year. With 500,000 of revenue and 300,000 of variable costs the ratio is 0.4, so with 100,000 of fixed costs break-even is 250,000 of revenue.

The formula assumes variable costs stay the same share of revenue. If sales shift towards lower-margin products the ratio falls and break-even moves up.

Margin of safety and profit at your plan

The margin of safety is how far sales can fall before you make a loss: (planned − break-even) ÷ planned × 100. With 400 units planned and break-even at 250, it is 37.5%, or 150,000 of revenue. Profit at the plan is 400 × 400 − 100,000 = 60,000.

To earn a set amount above your costs, add it to the fixed costs: a profit of 50,000 needs (100,000 + 50,000) ÷ 400 = 375 units.

Fixed costs 100,000, price 1,000, variable cost 600 per unit. Worked out with this calculator.
Units	Revenue	Costs	Profit
0	0	100,000	−100,000
125	125,000	175,000	−50,000
250	250,000	250,000	0
375	375,000	325,000	50,000
400	400,000	340,000	60,000
500	500,000	400,000	100,000

Operating leverage

Operating leverage = total contribution ÷ profit. At 400 units that is 160,000 ÷ 60,000 = 2.67: each 1% change in sales moves profit by 2.67%, up or down. Selling 440 units instead of 400 (+10%) lifts profit from 60,000 to 76,000 (+26.67%).

The closer sales are to break-even, the higher the leverage, which is why a small drop in sales near that point turns a profit into a loss so quickly.

How price moves the break-even point

A discount comes straight out of the contribution. Cutting the price by 10%, from 1,000 to 900, cuts the contribution from 400 to 300, a quarter, and break-even rises from 250 to 334 units. Raising the price by 10% brings it down to 200 units.

Fixed costs 100,000, variable cost 600 per unit. Worked out with this calculator.
Price	Contribution per unit	Break-even
800 (−20%)	200	500 units
900 (−10%)	300	334 units
1,000	400	250 units
1,100 (+10%)	500	200 units
1,200 (+20%)	600	167 units

Which costs are fixed and which are variable

Fixed costs do not change with sales within the period: rent, salaries, phone and internet, software subscriptions, depreciation of equipment. Variable costs rise with every unit sold: stock or materials, packaging, delivery, payment or marketplace fees, piece-rate pay.

If you expect to be paid from the business, put your own salary in fixed costs, or break-even will show a volume where the business loses nothing and you work for free. The model is a straight line: when growth needs bigger premises or another employee, fixed costs jump and break-even has to be worked out again.

What this calculator shows

The break-even point in units and in revenue, with the formula
Contribution per unit and the contribution margin
Profit, margin of safety and operating leverage at your planned sales
The units and revenue needed for a target profit
Profit at different volumes and break-even at other prices

What to keep in mind

Fixed costs stay the same within the period; price and variable cost per unit are constant.
Break-even units are rounded up to a whole unit; break-even revenue is not rounded.
Tax on profit and the payback of any investment are not included.

FAQs

How do I calculate the break-even point?

In units, divide fixed costs by the contribution per unit: 100,000 ÷ (1,000 − 600) = 250 units. In revenue, divide fixed costs by the contribution margin ratio: 100,000 ÷ 0.4 = 250,000.

How do I work out break-even in sales revenue?

Find the contribution margin ratio, (revenue − variable costs) ÷ revenue. With 500,000 of revenue and 300,000 of variable costs it is 0.4. Then divide fixed costs by it: 100,000 ÷ 0.4 = 250,000.

What is the margin of safety?

How far sales can fall before a loss: (planned sales − break-even) ÷ planned sales × 100. With 400 units planned and break-even at 250, it is 37.5%, or 150,000 of revenue.

How many units do I need to sell for a target profit?

(Fixed costs + target profit) ÷ contribution per unit. A 50,000 profit with 100,000 of fixed costs and a 400 contribution needs 375 units. Enter the amount in the target profit field.

What is contribution per unit?

The price minus the variable cost of one unit: 1,000 − 600 = 400. It is what each sale puts towards fixed costs and, past break-even, towards profit.

Why does a 10% discount move break-even so much?

Because the discount comes out of the contribution, not out of revenue as a whole. At a 40% margin, cutting the price from 1,000 to 900 removes 100 of the 400 contribution, a quarter, and break-even rises from 250 to 334 units.

What does operating leverage tell me?

How much faster profit moves than sales: total contribution ÷ profit. At 400 units it is 2.67, so 10% more sales means 26.67% more profit, and 10% fewer sales means 26.67% less.

Should my own salary be a fixed cost?

Yes, if you need to be paid. Leaving it out produces a break-even point the business can hit while you personally earn nothing.

What if variable cost exceeds the price?

Then there is no break-even point: every sale adds to the loss, and more volume makes it worse. The calculator will say the price does not cover the variable cost.

Worked example

Break-even and margin of safety

Input: Fixed costs 100,000, price 1,000, variable cost 600, 400 units planned

Output: Break-even at 250 units and 250,000 of revenue; profit at the plan 60,000, margin of safety 37.5%

Note: At a price of 900 break-even rises to 334 units: a 10% discount removes a quarter of the contribution.

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