Break-even calculator
Enter your costs and price, get how many you must sell.
How do I calculate the break-even point?
Break-even units = fixed costs ÷ (price − variable cost per unit). With $10,000 of fixed costs, a $50 price and $30 of variable cost, each sale covers $20, so you break even at 500 units — $25,000 of sales.
What are fixed and variable costs?
Fixed costs stay the same whatever you sell — rent, salaries, insurance. Variable costs grow with each unit — materials, packaging, shipping, payment fees.
What is contribution margin?
Price minus variable cost per unit — the $20 each sale above contributes toward fixed costs and then profit.
What if the price is below the variable cost?
Then every sale loses money and there is no break-even point — the calculator says so.
How does raising the price change it?
It raises the contribution per unit: at $60 instead of $50, each sale covers $30 and break-even drops from 500 to 334 units.
How do I find the break-even point in sales dollars?
Divide fixed costs by the contribution margin ratio, which is the contribution per unit as a share of the price. Here $20 ÷ $50 = 40%, and $10,000 ÷ 0.40 = $25,000. It is the same as break-even units times the price.
How many units do I need to reach a target profit?
Add the profit you want to the fixed costs before dividing: (fixed costs + target profit) ÷ contribution per unit. For a $5,000 profit on the example, ($10,000 + $5,000) ÷ $20 = 750 units.
How the break-even point works
The break-even point is the volume at which total costs equal revenue, so there is neither profit nor loss. Each unit sold brings in its price and costs its variable cost, and what is left, the contribution, goes first to the fixed costs. Fixed costs divided by the contribution gives the number of units needed. The SBA states the same formula for units and, for sales dollars, fixed costs divided by the contribution margin as a share of the price. The method assumes one product, a constant price and a constant variable cost per unit.
Worked example: $10,000 fixed, $50 price, $30 variable
Each sale contributes $50 − $30 = $20. Fixed costs of $10,000 ÷ $20 gives 500 units, and 500 × $50 = $25,000 of sales. Check the profit on either side: at 400 units the profit is −$2,000, at 500 units $0, at 600 units $2,000 and at 1,000 units $10,000. Every unit past break-even adds the full $20 to profit.
Common mistakes
Rounding down: if the answer is 333.3 units, selling 333 still loses money, so round up to the next whole unit. Counting a cost in the wrong group: the SBA points out that semi-variable costs, such as a phone plan, repairs, fuel or power, are part fixed and part variable and should be split where possible. Mixing time periods: costs that are billed quarterly or yearly must be converted to the same period as the other fixed costs before you add them. Treating the result as exact: the SBA calls it an estimate and suggests allowing about 10% for expenses you cannot predict. Finally, with several products at different margins, work out each one separately, as the SBA advises, instead of using one average price.
Sources: U.S. Small Business Administration, Break-even point (page updated October 3, 2024): the formulas in units and in sales dollars, fixed, variable and semi-variable costs, and the advice to treat the result as an estimate. The profit-at-volume lines and the target-profit formula are the same arithmetic applied to those inputs. See also the margin calculator, the ROI calculator and the commission calculator.
Estimates for planning only — not financial, tax or legal advice. Your lender's or employer's figures decide. How we check our calculators.