Break-Even Point Calculator
Find how many units you need to sell to cover your fixed costs.
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The break-even point is the number of units a business needs to sell before it stops losing money and starts turning a profit: the point where total revenue exactly equals total costs. It's one of the first numbers any new product or business idea should be checked against, since it turns "is this a good idea" into a concrete, testable sales target.
This calculator uses the standard contribution-margin method: how much each unit sold contributes toward covering fixed costs, after its own variable cost is subtracted. Once you know your break-even volume, the Payback Period Calculator and NPV & IRR Calculator can tell you whether the upfront investment behind those fixed costs is worth making at all.
How does this calculator work?
Enter your fixed costs (expenses that don't change with sales volume, like rent, salaries, or equipment depreciation), the price you'll charge per unit, and the variable cost to produce or deliver each unit.
The calculator first finds the contribution margin per unit: price − variable cost. This is the portion of every sale that's left over after covering that specific unit's own cost, available to pay down fixed costs (and, eventually, become profit). It's also shown as a percentage of price, the contribution margin ratio.
It then divides total fixed costs by that per-unit contribution margin: break-even units = fixed costs ÷ contribution margin. That answers "how many of these dollar-sized contributions does it take to fully offset the fixed costs?"
Since a fractional unit can't actually be sold, the result is rounded up to the next whole unit. Break-even revenue is simply that rounded unit count multiplied by the price per unit.
If variable cost is greater than or equal to price, the contribution margin is zero or negative, meaning no volume of sales could ever cover fixed costs, and the calculator flags this instead of returning a break-even point.
The U.S. Small Business Administration's guide and Square's break-even walkthrough both cover this same method with additional small-business context.
Worked example
$50,000 in fixed costs, selling a product at $25 with $10 in variable cost per unit.
- Contribution margin per unit
- $15 (60%)
- Break-even units
- 3,334
- Break-even revenue
- $83,333
How the numbers work
Each unit sold contributes $15 toward fixed costs after covering its own $10 variable cost, a 60% contribution margin.
Dividing the $50,000 in fixed costs by that $15 per-unit contribution gives 3,333.3 units, rounded up to 3,334 since a partial unit can't actually be sold. At $25 each, that's $83,333 in revenue to reach the break-even point.
Every unit sold beyond the break-even point drops straight to profit (minus its own variable cost), since fixed costs are already covered. This is why businesses with high fixed costs and thin margins need much higher volume to become profitable than businesses with a leaner cost structure.
Break-Even Point Calculator glossary
- Fixed Costs
- Expenses that stay the same regardless of how many units are sold: rent, salaries, insurance, and similar overhead.
- Variable Cost
- Costs that scale directly with each unit produced or sold: raw materials, direct labor, packaging, shipping.
- Contribution Margin
- Price per unit minus variable cost per unit, the amount each sale contributes toward covering fixed costs (and, beyond break-even, toward profit).
- Break-Even Point
- The sales volume (in units or revenue) at which total revenue exactly equals total costs, with zero profit or loss.
Break-Even Point Calculator FAQs
What happens if variable cost exceeds price?+
Then every unit sold loses money regardless of volume, and there's no break-even point at any sales level. Fixed costs aside, the pricing or cost structure itself needs to change before the product can ever be profitable.
Does break-even analysis account for taxes?+
No, this is a pre-tax operating break-even calculation. It shows when revenue covers costs, not full after-tax profitability, which would need additional assumptions about tax rates.
How is this different from payback period?+
Break-even point measures sales volume needed to cover ongoing costs in a given period. Payback period measures how long it takes to recoup an upfront investment through future cash flows, a related but distinct question.
Try the Payback Period CalculatorWhy round break-even units up?+
Because you can't sell a fraction of a unit in most businesses; reaching exactly 3,333.3 units still leaves you slightly short of covering fixed costs, so the next whole unit (3,334 here) is the true break-even point.
What if I sell more than one product?+
This calculator assumes a single price and variable cost. For multiple products, calculate a weighted-average contribution margin instead: multiply each product's contribution margin by its share of total sales mix, add those together, then divide total fixed costs by that blended figure. If one product dominates sales, running this calculator with just that product's numbers is often a close enough approximation.