Free Break-Even Calculator
Before you launch a product, sign a lease, or take on a loan, one number decides whether the plan is survivable: how much you have to sell before you stop losing money. This free break-even calculator answers it in units and in revenue, then goes further — showing your contribution margin, the volume needed to hit a target profit, and how far sales can fall before you are underwater.
It runs entirely in your browser, requires no sign-up, and nothing you type leaves your device.
How Break-Even Analysis Works
Every sale you make contributes something toward your fixed costs. Break-even is simply the point where those contributions have covered the fixed costs completely, and the next sale becomes profit.
The engine of the whole model is contribution margin — the price of one unit minus the variable cost of producing that unit. It is what each sale genuinely contributes.
- Contribution margin per unit = Price − Variable cost per unit.
- Break-even units = Fixed costs ÷ Contribution margin per unit.
- Break-even revenue = Fixed costs ÷ Contribution margin ratio, where the ratio is contribution margin ÷ price.
- Units for a target profit = (Fixed costs + Target profit) ÷ Contribution margin per unit.
Fixed vs. Variable Costs
Get this split wrong and every number the calculator produces is wrong. Fixed costs stay the same whether you sell one unit or ten thousand: rent, salaried staff, insurance, software subscriptions, loan payments. Variable costs move with each sale: materials, packaging, payment processing fees, shipping, hourly production labour, sales commission.
Two common traps. First, payment processing fees feel small but are genuinely variable and belong in the per-unit cost. Second, some costs are "step fixed" — a second delivery van, another shift supervisor — which stay flat only up to a threshold and then jump. This calculator assumes fixed costs stay fixed across the volume range you are testing, so re-run it for each step.
A Worked Example
Suppose you have $60,000 of annual fixed costs, sell your product for $50, and each unit costs $30 in materials, packaging and fees.
- Contribution margin: $50 − $30 = $20 per unit, a contribution margin ratio of 40%.
- Break-even units: $60,000 ÷ $20 = 3,000 units.
- Break-even revenue: $60,000 ÷ 0.40 = $150,000 (3,000 units × $50).
- For a $20,000 target profit: ($60,000 + $20,000) ÷ $20 = 4,000 units.
If you expect to sell 4,500 units, you clear break-even comfortably: profit is 4,500 × $20 − $60,000 = $30,000, and your margin of safety is 33.3% — sales could fall by a third before you stopped covering costs.
Margin of Safety: Your Buffer
Break-even tells you the edge of the cliff. Margin of safety tells you how far back from it you are standing: (Expected sales − Break-even sales) ÷ Expected sales.
A 33% margin of safety means demand could drop by a third before you start losing money. A 5% margin of safety means one bad quarter, one lost client, or one price war puts you underwater. It is the single best sanity check on an optimistic sales forecast.
When There Is No Break-Even Point
If your price is at or below your variable cost per unit, the contribution margin is zero or negative — every sale loses money, and no amount of volume will ever cover fixed costs. Selling more makes it worse. The calculator will tell you this outright rather than showing an impossible number.
There are only two fixes: raise the price, or cut the variable cost. Cutting fixed costs lowers the break-even point but cannot rescue a negative contribution margin. If your margin is thin — under about 15% — break-even becomes hypersensitive: a small price cut or cost increase can move it dramatically. Pair this with the profit margin calculator to test a new price before you commit.