Break-Even Calculator: Break-Even Analysis
The break-even point is the sales at which revenue covers all costs: fixed costs ÷ (price − variable cost per unit). Enter a unit price and cost, or just your margin, with fixed costs per month to see break-even units and sales, profit at five sales levels, margin of safety and payback. Free.
Fill in the price and variable cost of one unit and your fixed costs a month. No single price? Switch to the margin option. Add expected sales, a target profit or a one-off investment for the full analysis. Results update as you type and stay in this browser until you start over.
Break-even analysis example
A small studio sells a product for $40 that costs $16 a unit in materials, packaging and card fees. Rent, salaries and software come to $9,600 a month. It expects to sell 500 units a month and spent $24,000 to set up.
| Measure | Result |
|---|---|
| Contribution margin | $24 a unit, 60% |
| Break-even: $9,600 ÷ $24 | 400 units |
| Break-even sales | $16,000 |
| Profit at 500 units | $2,400 |
| Margin of safety | 100 units, 20% |
| Units for $4,800 profit | 600 units |
| $24,000 earned back in | 10 months |
Every unit after the 400th adds $24 of profit, and every unit short of it costs $24. Sales can fall 20% before the studio loses money, and at 500 units a month the set-up cost is back in 10 months.
Break-even formulas
- Contribution margin per unit: price − variable cost per unit.
- Break-even units: fixed costs ÷ contribution margin per unit, rounded up.
- Break-even sales: fixed costs ÷ contribution margin ratio, where the ratio is the margin ÷ price.
- Sales for a target profit: (fixed costs + target profit) ÷ contribution margin.
- Margin of safety: (expected sales − break-even sales) ÷ expected sales.
- Payback: one-off investment ÷ monthly profit.
How to lower your break-even point
Raise the price where customers accept it, cut the variable cost of each sale, or reduce fixed costs. A higher contribution margin moves break-even down fastest, because it also makes every sale above it more profitable. Check one product's numbers in detail with the contribution margin calculator, and test a campaign with the marketing ROI calculator.
Frequently asked questions
How do you calculate the break-even point?
Divide fixed costs by the contribution margin per unit: the price minus the variable cost of one unit. With $9,600 of fixed costs a month and a $40 product that costs $16 to make and sell, you break even at $9,600 ÷ $24 = 400 units, or $16,000 of sales.
What is a break-even analysis?
It shows how much you must sell to cover all your costs, and what profit or loss you make above or below that point. It is used to price a product, test a business plan, decide whether a new hire or office pays off and see how far sales can fall before you lose money.
How do I find break-even without a unit price?
Use your contribution margin as a percentage of sales: the share of each dollar left after variable costs such as materials, commissions and payment fees. Break-even sales = fixed costs ÷ that margin. With $9,600 of fixed costs and a 60% margin, you need $16,000 of sales a month.
What counts as fixed and variable costs?
Fixed costs stay the same whatever you sell: rent, salaries, insurance, software and loan payments. Variable costs grow with each sale: materials, packaging, shipping, sales commissions and card fees. If a cost is partly both, split it or put it in the group it mostly behaves like.
What is the margin of safety?
It is how far sales can fall before you reach break-even. Expecting 500 units with a break-even point of 400 gives a margin of safety of 100 units, or 20% of expected sales. The higher it is, the more room you have if a month goes badly.
Is what I enter stored or sent anywhere?
No. The calculation runs in your browser and the figures are saved only in this browser so you can come back to them. Nothing you enter is sent to SalesBond or anyone else. Click Start over to clear it.
Related tools: contribution margin calculator, profit margin calculator, marketing ROI calculator. More on sales and running a sales team on the SalesBond blog and the home page.
Official sources
- Wikipedia: Break-even point — break-even in units and in sales, and the margin of safety.
- Wikipedia: Contribution margin — contribution margin per unit and as a ratio.
- CFI: Break-even analysis — the formula and how to use it for planning.
Updated on Nov 7, 2026. This calculator is for information only and is not tax, legal or payroll advice. The result is only as good as the costs you enter: count every fixed cost for the month and every cost that grows with each sale.
