Break-Even Calculator: Free & Easy Tool

Break-Even Calculator

Currency

Fixed costs per month

Rent, salaries, insurance, software: costs that don't change with sales.

Selling price per unit

Variable cost per unit

Materials, packaging, shipping, payment fees: costs for each unit sold.

Target monthly profit (optional)

Expected units sold per month (optional)

Break-even point

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Results are estimates for planning only. The currency selector changes the symbol only; it does not convert amounts.

How to Use the Break-Even Calculator

Pick a tab. Use "By units" if you sell products with a clear price and cost per item. Use "By revenue" if you sell services or many products with different prices.
Enter your monthly fixed costs. Add up costs you pay no matter how much you sell: rent, salaries, insurance, loan payments, software.
Enter your price and variable cost per unit (or your gross margin percentage on the revenue tab).
Add a target profit or expected sales if you want to see how far you are from your goal.
Read your results. The calculator updates instantly as you type.

How It Works

The break-even point is the point at which total costs and total revenue are equal, so you earn no profit and take no loss. The U.S. Small Business Administration uses the same basic formula in its startup guide.

Contribution margin per unit = Price − Variable cost per unit

Break-even units = Fixed costs ÷ Contribution margin per unit

Contribution margin ratio = Contribution margin ÷ Price

Break-even revenue = Fixed costs ÷ Contribution margin ratio

Units for target profit = (Fixed costs + Target profit) ÷ Contribution margin per unit

Margin of safety = (Expected sales − Break-even sales) ÷ Expected sales

Break-even units are rounded up, because you can't sell part of a product. If your price is equal to or below your variable cost, every sale loses money and the calculator will tell you that break-even isn't reachable.

Worked Example

A small candle business has $10,000 in monthly fixed costs. Each candle sells for $50 and costs $30 to make, pack, and ship.

Contribution margin: $50 − $30 = $20 per candle (40% of the price)
Break-even: $10,000 ÷ $20 = 500 candles, or $25,000 in sales a month
To earn $5,000 profit: ($10,000 + $5,000) ÷ $20 = 750 candles
If the owner expects to sell 800 candles: profit = 800 × $20 − $10,000 = $6,000, and the margin of safety is (800 − 500) ÷ 800 = 37.5%

A 37.5% margin of safety means sales could fall by about a third before the business starts losing money.

Break-even calculator example showing $10,000 fixed costs, a $50 price and $30 variable cost, for a break-even point of 500 units or $25,000 — Example: 500 units, or $25,000 in monthly sales, to break even.

Break-Even Units vs. Break-Even Revenue

Measure	What it tells you	Best for
Break-even units	How many items you must sell to cover costs	Product sellers with one main price
Break-even revenue	How much money must come in to cover costs	Service businesses, restaurants, stores with many products
Units or revenue for target profit	What it takes to reach a specific profit goal	Setting sales goals and budgets
Margin of safety	How far sales can drop before you lose money	Judging risk before a price change or slow season

Where to Find Your Numbers

Fixed costs: your profit and loss statement or bank statements. Include rent, salaries, insurance, subscriptions, loan payments, and your own pay if you take a regular salary.
Variable cost per unit: supplier invoices plus packaging, shipping, payment processing fees, and sales commissions for each sale.
Gross margin: (revenue − cost of goods sold) ÷ revenue from your accounting software.
Expected sales: your recent monthly average, or a realistic forecast from your business plan.

What the Calculator Can and Cannot Tell You

It can tell you

The sales you need to stop losing money
How a price change shifts your break-even point
What it takes to hit a profit goal
How much cushion you have above break-even

It cannot tell you

Whether customers will pay your price
When cash actually arrives (use a runway calculator for that)
How costs change as you grow, such as hiring or a bigger space
Taxes, which come out of profit after break-even

Frequently Asked Questions

What is a good break-even point for a small business?

There's no single number. A good break-even point is one you can reach with realistic sales in a reasonable time. If break-even requires more sales than your market or capacity allows, raise prices, lower variable costs, or trim fixed costs before you scale up.

Should I include my own salary in fixed costs?

Yes, if you plan to pay yourself regularly. Leaving out your pay makes the business look profitable sooner than it really is. Many owners run the calculator twice: once with a salary, to see true break-even, and once without, to see when the business covers its other costs.

How do I lower my break-even point?

You have three levers: raise your price, lower your variable cost per unit, or cut fixed costs. Small price increases often have the biggest effect, because every extra dollar of price goes straight to contribution margin. Test each change in the calculator before you commit to it.

What's the difference between break-even and profit?

Break-even is the point where profit is exactly zero. Every unit you sell above break-even adds its contribution margin to profit, and every unit below it adds to your loss. In the example above, each candle past the 500th adds $20 of profit before taxes.

How often should I recalculate my break-even point?

Recalculate whenever prices, supplier costs, rent, or staffing change, and at least once a year. Rising costs can quietly push your break-even point up even when sales look steady, so a quick quarterly check is a smart habit for most small businesses.

Final Takeaway

Your break-even point is the minimum your business must sell to survive. Know it before you set prices, sign a lease, or hire, and recheck it whenever your costs change. If you're still planning the business, start with our guide on how to start a small business, and if you need funding to reach break-even, compare small business loans.

Sources: U.S. Small Business Administration, "Calculate your startup costs" (break-even definition and formula). Example figures are illustrative.

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Break-Even Calculator: Find Out How Much You Need to Sell to Cover Your Costs