Break Even Calculator
How many units you have to sell before the fixed costs are covered, and what that is worth in revenue — with the revenue and cost lines charted so you can see how far away the crossover actually is.
Free · No signup · Runs entirely in your browser
Every unit you sell contributes its price less its variable cost toward the fixed costs. Break-even is where those contributions finally cover them. This break-even calculator works out the volume, the revenue it implies, and charts where the two lines meet.
Rent, salaries, tooling — costs that do not move with volume.
What you sell one for.
What each additional sale costs you.
Optional — profit to clear on top of costs.
Every unit puts $15 toward the $2,700 of fixed costs, so it takes 180 units to clear them. After that, each additional unit is $15 of profit.
Work backwards from volume
$35.40 a unit — $30 of variable cost plus $5.40 of fixed cost spread across 500 units.
Break-even is a volume problem before it is a pricing one. If you are building the product largely on your own, Tekk turns what you want into specs your coding agent can actually execute.
The formula
contribution margin = price − variable cost per unit
break-even units = fixed costs ÷ contribution margin
break-even revenue = break-even units × price
The contribution margin is what one unit puts toward the fixed costs after paying for itself. Break-even is simply the point where enough units have contributed to cover them.
Worked example
You buy an item for $30, sell it for $45, and have $2,700 of fixed costs for the period.
| Step | Working | Result |
|---|---|---|
| Contribution margin | $45 − $30 | $15 |
| Margin as share of price | $15 ÷ $45 | 33.3% |
| Break-even units | $2,700 ÷ $15 | 180 units |
| Break-even revenue | 180 × $45 | $8,100 |
After unit 180, every further sale is $15 of profit. Before it, every sale is $15 of a hole you are still filling.
Adding a profit target
Profit is just another cost the business has to cover, so it goes on top of the fixed costs:
units for target profit = (fixed costs + target profit) ÷ contribution margin
On the same numbers, clearing $3,000 of profit takes (2,700 + 3,000) ÷ 15 = 380 units, or $17,100 of revenue. Note that the profit target more than doubled the volume — the fixed costs were only ever part of the problem.
Why price moves it more than costs
Price sits in the denominator, so it has leverage that trimming fixed costs does not:
| Change | New contribution margin | Break-even units |
|---|---|---|
| Baseline: $45 price | $15 | 180 |
| Price to $60 | $30 | 90 |
| Variable cost to $25 | $20 | 135 |
A third off the price gap halves the volume you need. This is the argument for fixing pricing before chasing efficiency — and it is also why a business selling below its variable cost cannot grow out of the problem. There, the contribution margin is negative and no volume ever reaches break-even.
Working backwards from volume
Often the volume is the constraint rather than the unknown. If you can realistically sell 500 units, the price that breaks even is:
price = variable cost + fixed costs ÷ units
At $30 of variable cost and $2,700 of fixed costs over 500 units, that is $35.40. Anything above it is profit; anything below it is a decision to lose money on purpose, which is sometimes right and should at least be deliberate.
What it assumes
One product, one price, one variable cost, all in the same period. Businesses with a range of products need a weighted average contribution margin across the mix, and a seasonal business should run the calculation per period rather than across a year — an annual figure can look comfortable while three individual quarters are underwater.
How it works
- 1
Enter fixed costs, price and variable cost
Fixed costs are the ones that do not move with volume — rent, salaries, tooling. Variable cost is what one more sale costs you. The break even calculator subtracts one from the price to get the contribution margin, which is the number everything else follows from.
- 2
Read the volume and the revenue
Fixed costs divided by contribution margin gives the units. Multiply by price and you have the same answer in revenue, which is usually the more useful of the two when you are checking it against a sales forecast.
- 3
Check the crossover, then work backwards
The chart draws revenue against total cost; they meet at the break-even point. If your realistic volume is fixed, the panel underneath solves the other way — what you would have to charge to break even at that number of sales.
Frequently asked questions
- How do you calculate the break-even point?
- Divide fixed costs by the contribution margin per unit, where contribution margin is price minus variable cost. Buy at $30, sell at $45, and each unit contributes $15; against $2,700 of fixed costs that is 180 units, or $8,100 of revenue.
- What is a contribution margin?
- What one unit contributes toward fixed costs after paying for itself. It is the single most important number here — everything a break even point calculator produces is fixed costs divided by it, so a small change in price or variable cost moves the required volume sharply.
- What is the difference between fixed and variable costs?
- Fixed costs are unchanged whether you sell one unit or a thousand: rent, salaries, software subscriptions. Variable costs are incurred per sale: materials, shipping, payment processing, per-seat infrastructure. Misclassifying one as the other is the most common reason a break-even figure comes out wrong.
- Can this work as a break even sales calculator in revenue terms?
- Yes — the revenue figure is shown alongside the unit count. As a break even sales calculator it multiplies the break-even volume by your price, which is the same as dividing fixed costs by the contribution margin ratio. Use whichever your forecast is expressed in.
- What if my product has no units?
- Use a subscription, a project, or a customer as the unit. A SaaS business would enter the monthly subscription price and the per-customer cost to serve. The arithmetic does not care what the unit is, only that price and variable cost refer to the same one.
- What happens if variable cost is higher than price?
- Break-even becomes unreachable and this break even calculator returns an em dash rather than a negative number. Every additional sale loses money, so volume makes the position worse rather than better. The price or the cost has to move before any volume target is meaningful.
- How do I include a target profit?
- Add it to the fixed costs before dividing. The target profit field does this: at $2,700 fixed costs, a $15 contribution margin and a $3,000 profit target, you need 380 units rather than 180. Profit is treated as one more cost the business has to cover.
- What is the margin of safety?
- The gap between your expected sales and the break-even point, usually expressed as a percentage of expected sales. If you break even at 180 units and expect 240, the margin of safety is 25% — sales could fall by a quarter before you start losing money. The break even calculator above does not ask for expected sales, so work this one out against whatever volume your forecast actually says.
- Does a break even point calculator work for a service business?
- Yes, with billable hours or engagements as the unit. Price is your rate, variable cost is whatever delivering an hour actually costs, and fixed costs are everything that continues whether or not you bill. The one thing to watch is capacity — a break even point calculator does not know you cannot sell 400 hours a month.
- Why does the answer change so much when I adjust the price?
- Because price affects the denominator, not the numerator. Raising a $45 price to $50 lifts the contribution margin from $15 to $20 — a third more per unit — and drops break-even from 180 units to 135. Pricing moves the break-even point far more than cost-cutting of the same size does.
- What does this leave out?
- Timing and mix. It assumes one product at one price with a constant variable cost, and that costs land in the same period as the sales they support. Businesses with several products at different margins need a weighted average contribution margin, and seasonal ones need the calculation per period rather than annually.
- Do you store the numbers I enter?
- No. The calculation runs entirely in your browser. Nothing is sent to a server, nothing is logged, and there is no account. Disconnect from the internet and it will still work.
- Why is this free, and what is Tekk?
- Tekk is a spec-driven development platform for people building software with AI coding agents. This calculator costs us nothing to run, and the founders working out whether the numbers close are often the same people building the product. No signup, no run limit, no upsell inside the tool.
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