Break-Even Calculator — Units, Revenue & Margin of Safety

Find your break-even point: how many units you must sell — and the revenue that represents — before a product or business stops losing money. Enter the fixed costs for the period, the selling price and the variable cost per unit; add expected sales to see the profit at that volume and the margin of safety, the percentage sales could fall before you are back in the red. A table shows profit at a range of volumes.

How to use Break-Even Calculator

Fixed costs: everything you pay whether you sell or not — rent, salaries, insurance, software — for the period (month or year).
Price and variable cost per unit: what one sale brings in and what it costs to make or buy that one unit.
Expected sales (optional) gives the profit and the margin of safety at that volume.

The arithmetic

Every unit sold contributes its price minus its variable cost — the contribution margin — towards fixed costs. Break-even units = fixed costs ÷ contribution per unit; break-even revenue = that × price. With 10,000 of fixed costs, a 50 price and a 30 variable cost, each sale contributes 20 and you break even at 500 units, or 25,000 of revenue. The contribution margin ratio (20 ÷ 50 = 40%) says what share of every sales dollar goes to fixed costs and then profit.

Reading the result

Break-even units is the target; everything after it is profit at the contribution rate.
Margin of safety = (expected − break-even) ÷ expected. 20% means sales can miss the forecast by a fifth before you lose money; 5% means you have no cushion.
A negative contribution (price below variable cost) means no volume will ever break even — the tool says so instead of reporting a nonsense number.

What counts as fixed and variable

Fixed costs do not change with volume in the period: rent, salaried staff, subscriptions, loan payments. Variable costs scale with each unit: materials, packaging, payment fees, commission, shipping you pay. Some costs are both (a wage that includes a per-sale bonus); split them. Use the same period for fixed costs and for the sales figure — monthly rent with monthly sales.

Using it for decisions

Three questions it answers quickly: how much does a price cut raise the break-even (a 10% price cut on a 40% margin raises break-even units by a third); whether a fixed-cost investment pays for itself at realistic volumes; and which of two products carries the business (the one with the higher contribution ratio, not the higher price).

Related: the percentage calculator for margins and markups, and the investment calculator for return on the money you put in.

Frequently asked questions

What is the break-even formula?

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). Break-even revenue = break-even units × price. The denominator is the contribution margin per unit.

What is the margin of safety?

How far sales can fall before you lose money: (expected sales − break-even sales) ÷ expected sales. 25% means a quarter of your forecast could vanish and you would still break even.

Why does it say "never"?

The variable cost per unit is at least as high as the price, so each sale loses money and more sales make it worse. Raise the price or reduce the per-unit cost; no volume fixes a negative contribution.

Which costs are fixed and which are variable?

Fixed: costs that stay the same regardless of how many units you sell in the period — rent, salaries, insurance, subscriptions. Variable: costs incurred per unit — materials, packaging, shipping, transaction fees, sales commission.

Can I use it for a service business?

Yes. Treat one hour, one session or one project as the unit, with its price and its direct cost (contractor pay, materials, travel). Break-even then reads as billable hours per month.