What is a break-even point?
The break-even point is the moment your total revenue equals your total costs — no profit, no loss. It is the first sales milestone a business must hit before it starts making money. Our break-even point calculator computes that milestone for you in units and in revenue, using only the three numbers that matter: fixed costs, price per unit, and variable cost per unit.
The formula, in plain English
Break-even units equals your fixed costs divided by the contribution margin (price minus variable cost). Multiply the result by the price to get break-even revenue. If you want to also net a target profit, add it to the fixed-costs numerator.
- Fixed costs — rent, salaries, insurance, software. The same every month.
- Variable costs — materials, packaging, payment fees, direct labor. They scale with each unit sold.
- Contribution margin — what each sale contributes toward paying off the fixed costs.
How to use this calculator
Type your monthly fixed costs on the left. Enter the price you charge per unit and what it costs you to deliver that unit. The result panel updates instantly. Use the Retail, SaaS, and Service presets to jump-start realistic numbers, then tweak the inputs to match your business.
What to do with the result
Once you know your break-even units, divide them by the number of days or sales periods in your month to find the daily sales target. If that number feels unreachable, you have three levers: raise the price, cut variable costs, or cut fixed costs. Raising price almost always produces the largest change in break-even because it grows both the numerator’s effective contribution and the margin ratio.
Common pitfalls to avoid
- Forgetting hidden fixed costs — include software, contractor retainers, and depreciation, not just rent and salaries.
- Mixing variable and fixed costs — if a cost changes with units, it is variable, even if it is billed monthly.
- Ignoring payment processing fees — a 2.9% fee quietly raises your variable cost per unit.
- Static planning — recalculate every time your cost base or pricing changes.
For a deeper view of profitability after break-even, try the Profit Margin Calculator. To see how long a new investment takes to pay off, use the ROI Calculator.