Break-Even Calculator
Find the exact point where a product stops losing money: enter fixed costs, your price per unit and the variable cost of making each unit.
How to use the break-even calculator
- Add up fixed monthly costs: rent, salaries, software, insurance — everything that does not change with volume.
- Enter the selling price of one unit.
- Enter the variable cost of one unit: materials, shipping, payment fees, per-unit labor.
- Read the units and revenue you need every month just to break even.
Formula
About this calculator
The break-even point is where total revenue equals total cost, and the concept hinges on the split between fixed and variable costs. Fixed costs exist whether you sell 10 units or 10,000; variable costs scale with each sale. The difference between price and variable cost — the contribution margin — is what each sale "donates" toward covering the fixed base.
Break-even analysis earns its keep in pricing decisions. Raise price by $5 on a $48 margin product and required units can drop by 10%; shave $3 of variable cost and the same thing happens. Because the required volume sits in the denominator, small margin improvements move the break-even point far more than intuition suggests.
Treat the output as a floor, not a target. Breaking even means covering costs, not surviving — you still need margin for the founder, a cash buffer, and the months where sales miss. A common discipline is to calculate break-even, then add a 20–30% safety margin and treat that as the real monthly target.
Frequently asked questions
What counts as a fixed cost?
Anything you pay regardless of sales volume: rent, salaried staff, insurance, software subscriptions. Marketing spend is debatable — treat committed campaigns as fixed, pure performance spend as variable.
What if my variable cost exceeds my price?
No sales volume can fix a negative contribution margin — every sale loses money. The only fixes are raising price, cutting unit cost, or killing the product.
How do I use break-even for pricing?
Set the price, see required units, and ask whether that volume is realistic for your channel. If not, either raise the price or reduce fixed costs — the calculator makes the tradeoff explicit.
Does break-even include taxes?
No — it is an operating calculation. For after-tax targets, convert your profit goal to a pre-tax figure and add it to fixed costs.