Break-Even Calculator
Find the exact units and revenue you need each month to cover your costs — and how far your current sales pace is from that line.
Written by Dorothy Ibrahim, 10+ years in banking & finance
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How we calculate this
This calculator finds the number of units — and the revenue — you must sell each month before your business stops losing money. It works from contribution margin: what each sale leaves behind after its own variable costs, which is the only money available to cover rent, salaries, and every other fixed cost. If you enter your current sales pace, it also shows how far above or below the line you are today.
The formulas
- Contribution margin per unit
- price per unit − variable cost per unitIf this is zero or negative, no sales volume can reach break-even — you lose money on every unit.
- Contribution margin ratio
- contribution margin per unit ÷ price per unit
- Break-even units per month
- monthly fixed costs ÷ contribution margin per unit
- Break-even revenue per month
- monthly fixed costs ÷ contribution margin ratio
- Monthly profit at current sales
- (current units × contribution margin per unit) − fixed costs
Worked example
- Say fixed costs are $10,000/month, your price is $50 per unit, and variable cost is $30 per unit.
- Contribution margin = $50 − $30 = $20 per unit, a 40% contribution margin ratio.
- Break-even units = $10,000 ÷ $20 = 500 units per month.
- Break-even revenue = $10,000 ÷ 0.40 = $25,000 per month.
- At a current pace of 400 units/month you are at 80% of break-even, losing $2,000/month; you need 100 more sales to cover fixed costs.
Rates, benchmarks & sources
- Break-even formula: fixed costs ÷ contribution margin — Standard managerial-accounting definition (rule of thumb thresholds not used)
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- Assumes one price and one variable cost — if you sell multiple products, use a weighted average or run each product separately.
- Treats fixed costs as truly fixed; step costs (a second employee, a bigger space) can move the break-even point as you grow.
- Ignores taxes and financing costs — it measures operating break-even only.
- Assumes every unit produced is sold; inventory build-up is not modeled.
Frequently asked questions
What counts as a fixed cost vs a variable cost?
Fixed costs stay the same whether you sell 10 units or 1,000 — rent, salaries, insurance, software subscriptions. Variable costs scale with each sale — materials, packaging, payment-processing fees, per-unit shipping. If a cost grows when sales grow, treat it as variable.
Why does the calculator show no break-even point for my numbers?
Your variable cost per unit is at or above your price, so each sale loses money and no volume of sales can cover fixed costs. You need to raise the price, cut the per-unit cost, or both — that is the warning the tool raises rather than showing a misleading number.
Is break-even revenue or break-even units more useful?
They are the same point expressed two ways. Units are more actionable for product businesses ("we need 500 sales a month"); revenue is easier to track for service or mixed businesses. The tool shows both so you can watch whichever matches your dashboard.
How do I use the sensitivity table?
It recomputes break-even units with your price and variable cost moved ±10%. A small price increase usually lowers the break-even point far more than a similar cost cut, because every extra dollar of price flows straight into contribution margin.
Does break-even include my own pay?
Only if you include it in fixed costs. Many owners exclude their own compensation and overstate how healthy the business is — if you need the business to pay you $5,000/month, add that to fixed costs so the break-even point reflects reality.