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Break-Even Point Calculator: Units, Revenue and a Break-Even Chart
Enter your fixed costs, your price and what each unit costs you, and see how many you need to sell each month to stop losing money. Chart and formula included.
Break-even point
– units a month
–Break-even revenue
–Contribution margin
–Margin of safety
–Profit at your sales
– units – in revenue
- Revenue
- Total costs
- Fixed costs
- Loss
- Profit
Everything is calculated in your browser: nothing is saved or sent. Units are rounded up: you can’t sell half a unit.
This break even point calculator tells you how many units you need to sell to cover every cost, and how much revenue that takes. Below that line you lose money; above it, every sale is profit. You get the result in units and dollars, with the chart and the formula in plain sight.
How to use the break-even calculator
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Add up your monthly fixed costs
What you pay whether you sell or not: rent, salaries, software, insurance and your accountant. If you run a fixed monthly ad budget, add it here.
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Enter your price and variable cost per unit
The price before sales tax. The variable cost is everything that goes out with each sale: product, packaging, shipping and payment fees.
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Add expected sales and the profit you want
Both are optional. Expected sales give you your margin of safety; a profit goal tells you how many units it takes to earn it.
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Read the chart and copy the result
Your break-even point is where the revenue line crosses the total cost line. To the left, in red, you lose money; to the right, in green, you make it.
How to calculate break even point: the break-even formula
The break-even formula divides your fixed costs by what each sale leaves you. With the calculator’s example ($5,000 in fixed costs, a $50 price and $20 of variable cost):
| What you calculate | Formula | With the example |
|---|---|---|
| Contribution margin | price − variable cost | 50 − 20 = $30 |
| Break-even units | fixed costs ÷ contribution margin | 5,000 ÷ 30 = 166.67 → 167 |
| Break-even revenue | units × price | 166.67 × 50 = $8,333.33 |
| Margin of safety | (expected − break-even) ÷ expected | (250 − 166.67) ÷ 250 = 33.3% |
| Units for a profit goal | (fixed costs + goal) ÷ contribution margin | (5,000 + 3,000) ÷ 30 = 266.67 → 267 |
Break-even units are rounded up, because unit 166 still leaves you in the red. Break-even revenue stays exact: it is the sales figure at which you cover your costs. The SBA’s break-even calculator uses the same logic.
Contribution margin and margin of safety
These two numbers tell you how much room you have:
- Contribution margin: what each sale leaves to pay fixed costs. In the example, $30 per unit, 60% of the price. The higher it is, the sooner you break even.
- Margin of safety: how far sales can fall before you lose money. With 250 expected sales and break-even at 166.67, you have a 33.3% cushion.
If you sell several products, run the same math with your average contribution margin. Contribution margin is a close cousin of gross margin, and the margin calculator helps you fine-tune it product by product.
Break even point example: three businesses worked out
Here are three made-up businesses with realistic numbers, all solved with the same formula: fixed costs ÷ contribution margin.
| Business | Fixed costs | Price | Variable cost | Break-even |
|---|---|---|---|---|
| Online store | $4,000 | $60 | $40 | 200 orders |
| Gym | $9,000 | $45 | $5 | 225 members |
| Design studio | $2,400 | $80 an hour | $10 an hour | 35 hours |
The store is the one to study. Its $40 of variable cost is $25 of product, shipping and fees plus $15 of ads for every order, so each sale leaves $20 instead of $35. Without the ads, break-even would be 115 orders; with them, 200. If you pay for ads per sale, put that cost inside your variable cost, or your break-even will look friendlier than it is. The studio’s 34.29 hours round up to 35.
Break even point in sales dollars: the formula without units
Sell services, subscriptions or hundreds of products? Counting units makes no sense, so you want the break even point in sales dollars.
Break-even sales = fixed costs ÷ contribution margin ratio.
The ratio is what stays from each sales dollar after variable costs: 1 minus variable costs as a share of sales. Take a made-up marketing agency with $8,000 in monthly fixed costs, where freelancers and payment fees eat 35% of every dollar billed. The ratio is 65%, so $8,000 ÷ 0.65 = $12,308 in sales a month. To earn $3,000 on top, ($8,000 + $3,000) ÷ 0.65 = $16,923.
To do it here, type 100 as the price and 35 as the variable cost, as if every sale were $100. The break-even revenue box then shows about $12,308.
Reading the break even analysis chart
The chart is a classic break even analysis. The dashed line is your fixed costs, flat whatever you sell. The red line is total costs, starting at your fixed costs and climbing with each unit. The blue line is revenue, starting at zero. Where blue crosses red you break even. The vertical dotted line marks your expected sales → you can see at a glance which side of the line you are on. To check whether each ad campaign pays for itself, use the ROI calculator.
Frequently asked questions about the break-even point
How to calculate a break-even point?
Divide your fixed costs by the contribution margin per unit, which is price minus variable cost. A coffee shop with $6,000 in monthly fixed costs that sells coffee at $4, with $1 of variable cost per cup, needs 6,000 ÷ 3 = 2,000 cups a month, about 67 a day over 30 days. Round up: half a cup doesn’t sell, and the last whole unit is the one that tips you into profit.
What is a good BEP?
One that sits well below the sales you can realistically make. Lower fixed costs and a higher contribution margin both push it down. Compare it with last year’s monthly sales: if your slowest month still clears break-even, you are in good shape. If only your best months do, you need to raise prices, cut costs or both before you scale up spending on ads or staff.
What is contribution margin?
It is what each sale leaves after its variable costs: the money that pays your fixed costs and then turns into profit. Sell something for $50 that costs you $20 in product, shipping and payment fees, and your contribution margin is $30, or 60% of the price. Until fixed costs are covered, those $30 go toward them; past break-even, every $30 is profit.
What is margin of safety?
It is how much your sales can drop before you start losing money, as a share of expected sales. The formula is (expected sales − break-even sales) ÷ expected sales. With 250 expected units and break-even at 166.67, the margin of safety is 33.3%: sales could fall by a third and you would still cover every cost. Add your expected sales to the calculator to see yours.
How do you calculate break even point in Excel?
Put fixed costs in B1, price in B2 and variable cost per unit in B3. Break-even units go in B4 with =ROUNDUP(B1/(B2-B3),0). Break-even revenue is =B1/(B2-B3)*B2, which skips the rounding. For the margin of safety, put expected sales in B5 and use =(B5-B1/(B2-B3))/B5, formatted as a percentage. The calculator above does all of this at once, plus the chart, so use a spreadsheet only if you want to keep a copy of your own numbers.