Break-even calculator
Enter your fixed costs, the selling price and the variable cost per unit. You get the units and revenue at which you break even.
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How do I calculate the break-even point?
Divide your fixed costs by what each unit contributes after its own variable cost: break-even units = fixed costs ÷ (price − variable cost). With $6,000 of fixed costs a month, a price of $25 and a variable cost of $10, each sale contributes $15, so you break even at 6,000 ÷ 15 = 400 units, or $10,000 of revenue. Add a target profit to the fixed costs to find the sales needed to earn it.
Why we built this calculator
Every business plan, side hustle and product launch has the same first question: how much do I have to sell before I stop losing money? The answer decides whether a price is workable, whether a market is big enough and whether a new cost, a new hire or a new rent is affordable. The calculation is short, but it is easy to get wrong by mixing fixed and variable costs. This calculator separates them for you, gives the break-even units and revenue, and extends the same logic to a target profit and to the margin of safety, which tells you how far sales can fall before you lose money.
Everything is worked out in your browser. Nothing you enter is sent anywhere.
How it works
Costs are of two kinds. Fixed costs do not change with how much you sell: rent, insurance, salaries, software, loan payments. Variable costs rise with each unit: materials, packaging, shipping, card fees, sales commission. Each sale brings in the price and uses up the variable cost, and what is left, the contribution, goes toward paying the fixed costs. You break even when the contributions add up to the fixed costs: units = fixed costs ÷ contribution per unit, rounded up to a whole unit. Dividing by the contribution margin (the contribution as a percentage of the price) gives the break-even revenue instead. For a target profit, add it to the fixed costs, because the profit is another amount the contributions have to cover. The margin of safety is how far expected sales are above break-even, as a percentage of expected sales.
How to use it
- Add up your fixed costs for the period you are looking at (for example a month).
- Enter the selling price and the variable cost of one unit.
- Optionally enter a profit you want, and the sales you expect.
- Read the units and revenue to break even, and what happens at your expected sales.
- Test changes: a higher price, a lower variable cost or lower fixed costs all lower the break-even point.
Use cases
- Testing whether a new product, shop or service can pay for itself
- Choosing a price by seeing how it changes the break-even point
- Deciding whether to add a cost such as a hire, an ad campaign or a bigger lease
- Setting a sales target for a month or a year
- A business plan or a loan application
- Teaching or learning basic business maths
Problems you may run into
Most trouble is about what counts as fixed and variable.
| What you see | Likely cause | What to do |
|---|---|---|
| 'Price must be above the variable cost' | Each unit loses money before fixed costs | Raise the price or cut the variable cost; there is no break-even point otherwise |
| The break-even is higher than I expected | Fixed costs or the variable cost are larger than I assumed | Check that every cost is in the right group and nothing is double counted |
| I sell several products | The calculator uses one price and cost | Use an average price and variable cost weighted by what you expect to sell, or run each product separately |
| Fixed costs rise as I grow | Real fixed costs step up (a second location, more staff) | Run the calculation for each level of activity |
| Taxes and my own pay | They are not in the figures unless you add them | Include your own pay in fixed costs if you want the business to cover it; leave out GST/HST you collect for the government |
Using the answer
Break-even is a minimum, not a goal. Sales just at break-even earn nothing; a margin of safety of 20% or more gives a cushion. If the break-even is more than you can realistically sell, change the model: a higher price, cheaper inputs, lower fixed costs or a different product. This is general information, not financial advice; speak to an accountant for a real business plan.
The formula
How the answer is worked out.
contribution per unit = price − variable costbreak-even units = fixed costs ÷ contribution per unit (rounded up)break-even revenue = break-even units × price = fixed costs ÷ contribution marginunits for target profit = (fixed costs + profit) ÷ contribution per unit; margin of safety = (expected − break-even) ÷ expected
Results assume a constant price and variable cost per unit and fixed costs that do not change with volume. Units are rounded up because you cannot sell part of a unit. Amounts are in Canadian dollars.
Example: a small online shop
Fixed costs are $6,000 a month; items sell for $25 with a variable cost of $10; you want a $3,000 profit and expect 700 sales.
- Contribution$25 − $10 = $15
- Break-even$6,000 ÷ $15 = 400 units, $10,000
- For $3,000 profit($6,000 + $3,000) ÷ $15 = 600 units
- At 700 unitsprofit 700 × $15 − $6,000 = $4,500; margin of safety 42.9%
400 units to break even; 700 expected sales earn $4,500
Sales could fall by 300 units before there is a loss.
Terms on this page
- Fixed cost
- A cost that does not change with sales, such as rent.
- Variable cost
- A cost that rises with each unit sold.
- Contribution margin
- The part of each sale left after the variable cost.
Common questions
What is the break-even point?
The sales at which total revenue equals total costs, so profit is zero.
What is the break-even formula?
Fixed costs ÷ (price − variable cost per unit).
What is contribution margin?
The share of each sale left after its variable cost, available to pay fixed costs and give profit.
What is the margin of safety?
How far sales can fall below your expected level before you stop making a profit.
Do I include tax?
Leave out GST/HST you collect and remit; use the price before tax.
Is anything I enter sent to a server?
No. The calculation happens in your browser and nothing you type leaves your device.
Where these numbers come from
- Wikipedia — Break-even (economics) The break-even point and how it is found.
- Wikipedia — Contribution margin Revenue minus variable costs.
- Government of Canada — Starting a business Federal guidance on planning and starting a business.
Last verified 2026-10-25 The method on this page is checked against the sources above at least once a year. Spotted something out of date? Tell us and we will fix it.
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