Break-Even Calculator
How many sales cover your costs, and how much room you have before a slow month turns into a loss.
Updated October 2026
Units sold per month on the x-axis. The lines cross at break-even.
Break-even formula
Break-even units = Fixed costs ÷ (Price − Variable cost per unit). The denominator is the *contribution margin*: what each sale contributes toward covering fixed costs. With $8,000 of monthly fixed costs, a $45 price, and $18 of variable cost, each unit contributes $27, so you need 8,000 ÷ 27 ≈ 297 units a month to break even. Multiply by price for break-even revenue: about $13,350.
Everything above that point is profit at the rate of $27 per unit; everything below is loss at the same rate.
Fixed vs. variable costs
- Fixed costs stay the same whether you sell 0 or 1,000 units: rent, salaries, insurance, software subscriptions, loan payments, your own draw.
- Variable costs rise with each unit: materials, packaging, shipping, payment-processing fees, sales commissions, marketplace fees.
Some costs are mixed (utilities, hourly labor). Split them as best you can; a rough split is far better than ignoring them. When in doubt, treat a cost as fixed, which makes the break-even estimate more conservative.
Margin of safety
The margin of safety is how far actual (or expected) sales sit above break-even, as a percentage. If you expect 400 units and break even at 297, sales can fall about 26% before you lose money. Under 10% is precarious; over 30% gives room to survive a bad quarter. It's one of the most useful numbers for deciding whether to take on a new fixed cost like a hire or a bigger space: add the cost above and watch the margin of safety shrink.
Three ways to lower your break-even
- Raise the price. Even $1 has an outsized effect because it goes entirely to contribution margin. The calculator shows the new break-even for a $1 increase.
- Cut variable cost. Negotiate materials, switch payment processors, or reduce packaging.
- Cut fixed costs. Harder, but the most durable. Converting a fixed cost to variable (commission instead of salary, per-use software instead of a flat plan) lowers the break-even at the cost of a smaller profit per unit above it.
Frequently asked questions
What is the break-even point?+
The sales volume where total revenue equals total costs, so profit is zero. Below it you lose money, above it you make money. This calculator gives it in units and in revenue.
How do I use this for a service business?+
Treat one billable hour (or one project) as the unit. Price is your hourly rate, variable cost is anything you pay per hour (subcontractors, per-job supplies), and fixed costs are your overhead. The result is the billable hours needed each month.
What if I sell several products?+
Use a weighted average: average price and average variable cost weighted by the sales mix. Or run the calculator once per product with fixed costs split by expected revenue share.
Why does the calculator say 'Never'?+
Your price is at or below the variable cost per unit, so each sale loses money and more volume only makes it worse. Raise the price or cut the per-unit cost.