27 · Calculators

Break-Even Calculator

Enter your fixed costs, selling price and cost per unit to see how many you need to sell before you start making a profit.

Rent, salaries, equipment — costs that don’t change with sales.

Break-even point

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How to use the break-even calculator

  1. Enter fixed costs for the period, such as a month.
  2. Enter the selling price of one unit.
  3. Enter the variable cost of making or buying one unit.

The break-even formula

Break-even units = fixed costs ÷ (price − variable cost). The difference between price and variable cost is the contribution each sale makes towards fixed costs. Once those are covered, every extra sale is profit.

Using the result

  • If the number is too high, try raising the price, cutting variable costs or reducing fixed costs.
  • Run it for a month and for a year to see how long it takes to break even.

Examples

12,000 fixed costs, price 50, variable cost 20

400 units · 20,000.00 revenue

5,000 fixed, price 15, variable cost 6

556 units

Questions

Why is the number rounded up?

You can’t sell part of a unit, so the calculator rounds up to the first whole unit that covers your costs. The exact figure is shown underneath.

What counts as a fixed cost?

Anything you pay whether you sell or not: rent, salaries, software, insurance, loan repayments.

What if price is below variable cost?

Then every sale loses money and you can never break even. The calculator tells you so.