Break-Even Calculator
Find the number of units you need to sell to cover fixed costs — and how many more to hit a target profit.
With $10,000.00 in fixed costs and a contribution margin of $20.00 per unit (40.0% of price), you need to sell 500 units — that's $25,000.00 in revenue.
Results update as you type. Match the period of fixed costs to the period you want to break even over (e.g. monthly fixed → monthly break-even units).
Formula
Break-even units come from a single division:
units = fixed_costs / (price − variable_cost).
The denominator is the contribution margin per unit. Add a target profit to budget upward:
units = (fixed + target_profit) / (price − variable_cost).
The result is rounded up because partial units don't sell — selling 142 of 142.86 leaves you
short of break-even.
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Frequently asked questions
Fixed vs variable costs — what's the line?▾
Fixed: doesn't change with sales volume. Rent, base salaries, software subscriptions, insurance, professional services. Variable: scales with each sale. COGS, packaging, payment processor fees (Stripe ~2.9%+30¢), sales commissions, per-unit shipping. Some costs are mixed (utilities have a base + usage component) — for break-even maths, simplify by assigning each cost to whichever side it leans toward more.
What is contribution margin?▾
Selling price minus variable cost per unit. It's what each sale contributes toward fixed costs and profit. $50 price minus $30 variable = $20 contribution per unit. The contribution margin ratio (40% in this case) is that figure as a percentage of price. The higher the ratio, the more leverage you have on each sale.
Why round up the number of units?▾
You can't sell a fraction of a unit. If the formula says 142.86 units to break even, selling 142 leaves you short and 143 is the first whole number that clears costs. The unrounded figure is shown for transparency, but the ceiling is the practical minimum.
How does this apply to a service business?▾
Substitute 'unit' with hour, day, or engagement. For a $200/hr consultant: price/unit = $200, variable cost = your direct cost of delivering that hour (subcontractor pay, project-specific tooling, travel/expenses for that hour). Fixed costs = your monthly overhead. The output is billable hours per month to break even.
How is target profit different from break-even?▾
Break-even (target = 0) covers your costs. Target profit asks: 'how many more units to make $X net?' Same arithmetic, larger numerator: units = (fixed + target profit) / contribution margin. Useful when you have a profit goal — owner draw, dividend target, expansion budget — and need to back-solve sales volume.
Monthly or annual? Does it matter?▾
It matters that you're consistent. If your fixed-costs figure is monthly, the unit answer is per month. Annual figures give annual unit counts. Don't mix periods (e.g., yearly fixed costs with monthly target profit) — the answer won't mean anything.