Profit & Margin
Break Even Calculator
Find your breakeven point in units and revenue.
Break Even Calculator
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How it works
Break even is the point where revenue covers all costs and profit turns from negative to positive. It sits on the price-cost-volume triangle: raise price, cut variable cost or trim fixed cost and the break-even point moves.
The calculator returns both the number of units and the revenue level, because different businesses think in different units. Below the break-even units you lose money; above them, every unit contributes pure profit after fixed costs are covered.
Formula
Break-even units = Fixed cost / (Price − Variable cost)
Break-even revenue = Price × units. The margin (Price − Variable) is the contribution of each unit toward fixed costs.
Worked example
Example: fixed costs $5,000, price $25, variable cost $15. Contribution per unit = $10, so break-even units = 5000 / 10 = 500 units, and break-even revenue = 25 × 500 = $12,500. Sell 501 units and you start to profit.
WORKED EXAMPLE — DEFAULT INPUTS
Contribution Margin Calculator
Contribution margin is the money each unit adds after its own variable cost. It is the engine that pays fixed costs first and builds profit afterwards. A strong contribution margin gives a business room to absorb higher fixed costs or survive a price cut.
Contribution Margin Calculator
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Small Business Break Even with Employees
For a small business with staff, include wages in fixed cost to see the true break-even volume. Each employee adds monthly payroll, benefits and payroll taxes, which raises the fixed base and pushes the break-even point higher. Run the number before you hire: the new hire is only worth it if you can realistically clear the extra units.
Small Business Break Even with Employees
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FAQ
What counts as fixed cost?
Costs that do not change with volume: rent, salaries of core staff, insurance, software subscriptions. Variable costs move with each unit: materials, packaging, shipping.
What if price equals variable cost?
Then there is no contribution and the business can never break even. Price must exceed variable cost for any volume to help.
How do I use this with employees?
Add salaries to fixed cost, or count them as part of the variable cost if staff are paid per job. The employee section below walks through both approaches.
Is break even the same as contribution margin?
Contribution margin is the per-unit engine (price minus variable cost). Break even divides fixed cost by that engine to find the volume needed.