Find exactly how many sales you need to cover costs — and when your business turns profitable.
Fixed Costs / Month ($)
$
Variable Cost per Unit ($)
$
Price per Unit ($)
$
Target Profit / Month ($)
$
Break-Even Units / Month
0
Units needed to cover all costs
Break-Even Revenue
—
monthly sales target
Contribution Margin
—
per unit sold
Margin %
—
of selling price
Units for Target Profit
—
to hit your goal
Revenue for Profit
—
with target profit
Annual Break-Even
—
units per year
⚠ Your price is at or below variable cost — you lose money on every sale.
Understanding Break-Even Analysis
The break-even point is where total revenue equals total costs — zero profit, zero loss. Every unit sold above break-even generates pure profit (the contribution margin).
Break-Even Units = Fixed Costs ÷ (Price − Variable Cost)
Contribution Margin = Price − Variable Cost per Unit
Units for Target Profit = (Fixed Costs + Target Profit) ÷ Contribution Margin
Variable costs scale with each unit: raw materials, shipping, payment processing fees, sales commissions, packaging
Semi-variable costs (utilities, overtime) are usually allocated to one category or split
How to use break-even for pricing decisions
If your break-even requires 500 units/month but you can realistically sell 200, you have three options: raise price, cut fixed costs, or reduce variable costs. The calculator instantly shows the impact of each change.
Break-Even FAQ
Depends on the industry. Software/SaaS: 70–90% (very low variable cost). Services: 40–70%. Retail: 30–50%. Manufacturing: 20–40%. Restaurants: 60–70% (food cost ~30%). Higher is always better — it means more of each dollar of revenue flows to covering fixed costs and profit.
For services, "units" can be hours billed, client engagements, or monthly retainers. Set "price" to your rate per unit, and "variable cost" to your time cost (hourly salary or contractor cost per unit). Fixed costs cover overhead. The break-even tells you the minimum number of billable units per month.
Margin of safety = (Actual Sales − Break-Even Sales) ÷ Actual Sales. If you're selling 600 units and break-even is 400, your margin of safety is 33% — meaning sales could drop 33% before you lose money. Healthy businesses target 20%+ margin of safety.