Break-Even Calculator
Find how many units you must sell to cover your fixed and variable costs, and the revenue needed to break even.
What break-even means
The break-even point is the sales volume at which total revenue equals total costs, so you make neither a profit nor a loss. Every unit sold beyond it adds profit.
Break-even units = Fixed costs ÷ (Price − Variable cost per unit)
The bottom part of that formula, price minus variable cost, is the contribution margin: how much each sale contributes toward covering fixed costs.
Example
A small online shop has $12,000 of monthly fixed costs and sells a product for $49 that costs $19 to make and ship. Each sale contributes $30, so it needs 12,000 ÷ 30 = 400 sales a month, or $19,600 in revenue, to break even.
Using break-even analysis
- Test prices. Raising the price to $55 lifts the contribution margin to $36 and drops break-even to 334 units.
- Plan hiring. Add a new salary to fixed costs to see how many more sales it requires.
- Reduce variable costs. Cheaper packaging or shipping raises margin on every unit.
- Set targets. Add your desired profit to fixed costs to find the units needed for that profit.
Frequently asked questions
What is the difference between fixed and variable costs?
Fixed costs stay the same whatever you sell, such as rent and salaries. Variable costs rise with each unit sold, such as materials, shipping and payment processing fees.
What is contribution margin?
Contribution margin is the selling price minus the variable cost per unit. It is the amount each sale contributes toward fixed costs and then profit.
How do I calculate break-even in dollars?
Multiply the break-even units by the price, or divide fixed costs by the contribution margin ratio (contribution margin ÷ price).
Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.