Break-Even Calculator — Find Your Break-Even Point Instantly

How it works

Enter your fixed costs for the period (rent, salaries, insurance), your variable cost per unit (materials, packaging), and your selling price per unit. The calculator divides fixed costs by the contribution margin (selling price minus variable cost) to find how many units you must sell to cover everything. The chart shows revenue and total cost lines crossing at the break-even point.

Common mistakes

• Misclassifying costs — rent does not scale per unit (it is fixed), but part-time labour and sales commissions usually do scale (they are variable). Putting a "semi-variable" cost like utilities into the wrong bucket can shift the break-even point by 20% or more. Split anything ambiguous into a fixed base plus a per-unit slice.
• Rounding break-even units down — if the calculator returns 399.4 units, the answer is 400, not 399. You do not break even at 399; you are still losing money on the last fraction of a unit. Always round break-even volume up.
• Discounting below contribution margin — a "10% off" promotion on a product with a 35% gross margin still earns 25% per sale, but a 40% discount earns negative contribution on every unit. The more you sell, the more you lose. Always check the post-discount contribution margin before launching a promotion.

When to use this calculator

Use this when you have fixed and variable costs in hand and want to know the unit volume or revenue level required to cover them — typical when launching a new product, opening a new location, or pricing a service that has setup costs.

If you are trying to recover a one-off investment (equipment, a fit-out, software), the Payback Period Calculator is the better tool. To check the per-unit cost floor that sets your minimum price, use the Cost Per Unit Calculator instead.

Worked example

A UK independent café opens with £8,000 of fixed monthly costs: £3,200 rent, £3,800 for two part-time baristas including employer NI, £600 utilities, and £400 for software and accounting. Average order value is £6.50 (a coffee plus a pastry). Variable cost per order is £2.20 — beans, milk, the pastry from a local bakery, paper cup, and the card-processing fee.

Contribution margin per order is £6.50 − £2.20 = £4.30. Break-even orders per month = £8,000 ÷ £4.30 = 1,861 orders, or roughly 62 orders per day across a 30-day month. At 70 orders per day the café generates 70 × 30 × £4.30 = £9,030 of monthly contribution, leaving £1,030 of operating profit after fixed costs. At 50 orders per day the contribution drops to £6,450 and the café loses £1,550 per month.

Notice how non-linear the swing is: a 30% decline in volume (70 → 50 orders/day) doesn't produce a 30% lower profit — it flips a £1,030 profit into a £1,550 loss, a £2,580 swing. Hospitality businesses with high fixed costs and thin contribution margins live or die on volume above break-even. The two levers to widen contribution are raising average order value (a £1 upsell on every order adds £900/month at 30 orders/day) or shaving variable cost per unit by 20–30 pence through supplier negotiation.

Frequently Asked Questions

Glossary

Contribution Margin

Selling price minus variable cost per unit — the profit each sale contributes toward covering fixed costs.

Fixed Costs

Costs that stay the same regardless of how many units you sell.

Variable Costs

Costs that scale directly with each unit produced or sold.

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Read the comparison

Try these scenarios

Pre-filled examples — click any chip to load the inputs and result.

• Coffee shop: $5k fixed / $3 var / $7 price
• SaaS startup: $30k fixed / $5 var / $49 price
• Manufacturer with $20k profit target

How to calculate your break-even point

1. 1
   Enter monthly fixed costsList rent, salaries, insurance, and any cost that doesn't change with output, then total them in the Fixed Costs field.
2. 2
   Add variable cost per unitMaterials, packaging, commission, and platform fees — the per-unit costs that scale with each sale.
3. 3
   Enter selling price per unitWhat you charge customers per unit sold.
4. 4
   Optionally add a target profitEnter a profit goal to see units needed to clear costs plus the target profit.
5. 5
   Read break-even units and chartThe chart shows the revenue and total-cost lines crossing at break-even. Round units up — you don't break even at 399 if the result is 400.