Break Even Calculator

Break Even Calculator

Find your break even point in units and revenue — free for any business type, instant results

✓Instant Results 2Calculator Modes ▶Interactive Chart $Free Forever

Enter your costs and selling price to find exactly how many units you need to sell to break even.

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Optional: Enter expected units to see time-to-break-even. Enter desired profit to see units needed for that profit target.

⚠ Selling price must be greater than variable cost per unit.
Break Even Units
0
Break Even Revenue
$0
Contribution Margin
$0 / 0%
Break Even Chart — Cost vs Revenue
Sensitivity Analysis — What if you sell more or less?
ScenarioUnits SoldRevenueTotal CostsProfit/Loss

Perfect for service businesses, SaaS, and consulting where tracking "units" is difficult. Enter your costs and revenue percentage.

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Variable Cost Ratio = % of revenue spent on materials, labor, commissions. E.g. if 30% of revenue goes to costs, enter 30.

Break Even Revenue
$0
Contribution Margin %
0%
Operating Profit
$0
Break Even Chart — Revenue Scenarios
Sensitivity Analysis — Revenue Scenarios
ScenarioRevenueVariable CostsTotal CostsProfit/Loss

What Is a Break Even Point?

The metric every business owner must know before making a single sale.

The break even point is the exact number of units you must sell each month to cover all your costs — no profit, no loss. Sell fewer units and you're operating at a loss. Sell more and every additional unit generates pure profit.

Think of it as the finish line you must cross before your business starts earning money. Every business has one — whether you sell physical products, provide services, or run a restaurant. Knowing your break even point helps you set realistic sales targets, validate your pricing, and make confident financial decisions.

Break even analysis is also essential when pitching to investors, applying for a business loan, or deciding whether to launch a new product line. It answers the most critical business question: How much do I need to sell just to survive?

How to Use This Calculator

Three numbers in — your complete break even analysis out. Takes under 60 seconds.

1

Enter Fixed Costs

Add your total monthly fixed expenses — rent, salaries, insurance, software subscriptions, equipment leases. These don't change with sales volume.

2

Enter Variable Cost

Enter the cost to produce or deliver one unit — materials, packaging, shipping, direct labor. This is what each sale costs you.

3

Enter Selling Price

Enter the price you charge customers for one unit or service. Make sure this is higher than your variable cost per unit.

4

See Full Analysis

Instantly see break even units, revenue needed, contribution margin, sensitivity analysis table, interactive chart, and margin of safety — no button click needed.

Break Even Formula Explained

Four formulas — from basic break even to calculating units needed for any profit target.

Formula 1 — Break Even Point in Units
Break Even Units = Fixed Costs ÷ (Selling Price − Variable Cost)
The denominator is your Contribution Margin per unit
Formula 2 — Break Even Revenue
Break Even Revenue = Break Even Units × Selling Price
Or: Fixed Costs ÷ Contribution Margin Ratio
Formula 3 — Units Needed for a Target Profit
Target Units = (Fixed Costs + Desired Profit) ÷ Contribution Margin
Use this to work backwards from a profit goal — now available in the calculator above!
Formula 4 — Contribution Margin
Contribution Margin = Selling Price − Variable Cost per Unit
Contribution Margin Ratio (%) = (CM ÷ Selling Price) × 100

Step-by-Step Example

Fixed Costs: $5,000/month  |  Variable Cost: $15/unit  |  Selling Price: $35/unit
Step 1 — Contribution Margin: $35 − $15 = $20 per unit
Step 2 — Break Even Units: $5,000 ÷ $20 = 250 units/month
Step 3 — Break Even Revenue: 250 × $35 = $8,750/month
Step 4 — CM Ratio: $20 ÷ $35 = 57.1%
Result: Sell 250 units or earn $8,750 revenue to break even. Every unit after that = $20 profit.

Excel & Google Sheets Formula

If A1=Fixed Costs, B1=Selling Price, C1=Variable Cost per unit:

=A1/(B1-C1)

For break even revenue: =A1/(B1-C1)*B1   |   For target profit (D1): =(A1+D1)/(B1-C1)

Break Even Calculator Examples by Industry

Real calculations using realistic US business numbers — retail, restaurant, and freelancer.

Retail Store Break Even Example

Clothing boutique — monthly fixed costs + per-item costs

Fixed Costs
$5,000
Rent $3K + Staff $1.5K + Utilities $500
Variable Cost/Unit
$15
Wholesale $12 + Packaging $3
Selling Price
$35
Retail price per item
Break Even Units
250 units/month
Break Even Revenue
$8,750/month
Contribution Margin
$20 / 57%
CM = $35 − $15 = $20  |  BEP = $5,000 ÷ $20 = 250 units  |  Revenue = 250 × $35 = $8,750

Restaurant Break Even Example

Casual dining — average meal price with food and labor costs

Fixed Costs
$12,000
Rent $6K + Staff $4K + Utilities $2K
Variable Cost/Meal
$6
Food cost + disposables per meal
Average Meal Price
$19
Average revenue per customer
Break Even Meals
923 meals/month
Per Day (30 days)
~31 meals/day
Break Even Revenue
$17,538/month
CM = $19 − $6 = $13 per meal  |  BEP = $12,000 ÷ $13 = 923 meals  |  923 ÷ 30 days = 31 meals/day

Freelancer / Service Business Example

Web designer — monthly overhead vs project pricing

Fixed Costs
$2,000
Software $500 + Workspace $1K + Internet $500
Variable Cost/Project
$75
Stock photos, plugins, subcontractors
Project Price
$575
Charged per website project
Break Even Projects
4 projects/month
Break Even Revenue
$2,300/month
Profit at 6 Projects
$1,000/month
CM = $575 − $75 = $500 per project  |  BEP = $2,000 ÷ $500 = 4 projects  |  6 projects: ($500 × 6) − $2,000 = $1,000 profit

Fixed Costs vs Variable Costs

Understanding the difference is essential for an accurate break even calculation.

Fixed Costs Stay Constant

  • Rent or mortgage payments
  • Employee salaries (non-commission)
  • Business insurance premiums
  • Software subscriptions
  • Equipment leases
  • Loan repayments
  • Phone and internet (flat rate)
  • Accounting and legal fees

Fixed costs represent your monthly survival threshold — the amount you must cover before selling a single unit. The higher your fixed costs, the more units you need to sell to break even.

Variable Costs Scale with Sales

  • Raw materials and ingredients
  • Packaging and labeling
  • Shipping and delivery costs
  • Sales commissions
  • Credit card processing fees
  • Direct labor per unit
  • Returns and refunds
  • Payment platform fees

Variable costs increase with every unit you sell. A lower variable cost means a higher contribution margin — so you reach break even faster with each sale generating more toward covering fixed costs.

Semi-Variable Costs — Where It Gets Complicated Some costs have both fixed and variable components. Utilities often have a base monthly fee (fixed) plus usage charges (variable). Part-time staff may be fixed for minimum hours but variable for overtime. For your break even calculation, estimate these carefully — slightly overestimate to build a safety buffer.

How to Improve Your Break Even Point

Three proven strategies — each shown with a real calculation using our retail example ($5,000 fixed, $15 variable, $35 price = 250 units BEP).

1

Raise Your Selling Price

Even a modest price increase dramatically reduces your break even point. A 10% price increase on a $35 item raises it to $38.50 — that extra $3.50 goes directly to contribution margin.

$35 → $38.50 (+10%): CM = $23.50 | BEP = $5,000 ÷ $23.50 = 213 units (vs 250) — 37 fewer units to sell!
2

Reduce Variable Costs

Negotiate better rates with suppliers, buy in bulk, or find more efficient production methods. Every dollar saved on variable cost adds directly to contribution margin.

$15 → $12 variable cost (-20%): CM = $23 | BEP = $5,000 ÷ $23 = 217 units (vs 250) — 33 fewer units needed!
3

Reduce Fixed Costs

Renegotiate your lease, switch to remote work, cancel unused subscriptions, or share office space. Every dollar cut from fixed costs directly lowers your break even point.

$5,000 → $4,000 fixed (-$1,000): BEP = $4,000 ÷ $20 = 200 units (vs 250) — 50 fewer units to sell each month!

Who Uses a Break Even Calculator?

From first-time entrepreneurs to experienced accountants — everyone benefits from knowing their numbers.

S

Startups & New Businesses

Validate your business idea before investing. If your break even point requires selling more units than the market can support, you need to rethink pricing or costs before launch.

B

Small Business Owners

Set monthly sales targets based on data, not guesswork. Know exactly how many sales you need this month to cover payroll, rent, and all overhead costs.

F

Freelancers & Consultants

Determine your minimum number of clients or projects needed each month. Use it to set your rates confidently and ensure your business is financially sustainable.

A

Accountants & Financial Advisors

Quickly analyze client business models, build investor presentations, and support business plan development with clear break even analysis and sensitivity scenarios.

Frequently Asked Questions

Everything you need to know about break even analysis and this calculator.

The break even point is the exact number of units you must sell — or the exact revenue you must earn — to cover all your costs with zero profit and zero loss. Above this point every additional sale generates profit. Below it you are operating at a loss. It is the most fundamental financial metric for any business.

Divide your total fixed costs by the contribution margin per unit (selling price minus variable cost). Example: $5,000 fixed costs ÷ ($35 selling price − $15 variable cost) = $5,000 ÷ $20 = 250 units. For break even revenue: 250 × $35 = $8,750. Our calculator does this instantly.

There are two main formulas. Break Even in Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). Break Even Revenue = Fixed Costs ÷ Contribution Margin Ratio, where Contribution Margin Ratio = (Selling Price − Variable Cost) ÷ Selling Price. For a target profit: Units Needed = (Fixed Costs + Target Profit) ÷ Contribution Margin.

Fixed costs are expenses that remain constant regardless of how many units you sell. They include rent, employee salaries, insurance premiums, software subscriptions, equipment leases, and loan repayments. You pay these costs even if you sell zero units in a month.

Variable costs change directly with the number of units you produce or sell. They include raw materials, packaging, shipping costs, sales commissions, credit card processing fees, and direct labor per item. If you sell zero units you pay zero variable costs — they only occur with each sale.

Contribution margin is the amount left from each sale after subtracting variable costs. Formula: Selling Price − Variable Cost per Unit. For example, if you sell at $35 and variable cost is $15, contribution margin is $20 per unit. This $20 "contributes" toward covering your fixed costs. A higher contribution margin means you need fewer sales to break even.

Enter your fixed costs, variable cost per unit, and selling price into our calculator above — you will see your break even units instantly. The formula is: Fixed Costs ÷ (Selling Price − Variable Cost). With $5,000 fixed costs, $15 variable cost, and $35 price: $5,000 ÷ $20 = 250 units per month.

Break even revenue is the total dollar amount of sales needed to cover all costs. It equals your break even units multiplied by your selling price. Alternatively: Fixed Costs ÷ Contribution Margin Ratio. For service businesses that do not track units, break even revenue is often more useful than break even units.

For a restaurant, treat each meal as a "unit." Fixed costs include rent, full-time staff, and equipment. Variable costs are food cost and disposables per meal. Example: $12,000 fixed costs, $6 food cost per meal, $19 average meal price. Contribution margin = $13. Break even = $12,000 ÷ $13 = 923 meals per month — about 31 meals per day on a 30-day month.

For freelancers, each project or client engagement is a "unit." Fixed costs are your monthly overhead — workspace, software, insurance. Variable costs per project include software tools, stock photos, or subcontractor fees. Example: $2,000 fixed costs, $500 contribution margin per project = 4 projects needed per month to break even. Use our Revenue-Based tab if tracking units is difficult.

A break even point that is too high to realistically achieve means your current business model may not be viable. Three solutions: (1) Raise your selling price — even a 10% increase significantly reduces break even. (2) Reduce variable costs — negotiate with suppliers or find cheaper materials. (3) Reduce fixed costs — cut unnecessary subscriptions, consider remote work, or renegotiate your lease. Use our sensitivity analysis table to model each scenario.

If A1 = Fixed Costs, B1 = Selling Price per unit, C1 = Variable Cost per unit: Break even units = =A1/(B1-C1). Break even revenue = =(A1/(B1-C1))*B1. For target profit in D1: =(A1+D1)/(B1-C1). These formulas work identically in Microsoft Excel and Google Sheets.

The break even point is where profit equals exactly zero — total revenue equals total costs. Profit begins after you pass the break even point. Every unit sold beyond break even generates profit equal to the contribution margin. Example: If break even is 250 units and you sell 300, profit = 50 units × $20 contribution margin = $1,000 monthly profit.

Yes, using the weighted average contribution margin method. Estimate what percentage of your total sales each product represents — your sales mix. Then calculate a blended average contribution margin weighted by that mix. Plug this single blended number into the break even formula to get your overall business break even point.

Yes — completely free with no signup, no registration, and no credit card required. You can use it unlimited times, download your results as CSV, print as PDF, share a link, or embed it on your own website. ReverseSalesTax.com provides free financial calculation tools for US businesses.

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Important Disclaimer — Not Professional Financial Advice The tools and information on ReverseSalesTax.com are for general informational and educational purposes only. Break even calculations are estimates based on inputs you provide — actual results will vary based on market conditions, seasonality, and factors not captured in this model. Always consult a qualified accountant, CPA, or financial advisor before making major business decisions. ReverseSalesTax.com is not liable for errors or business decisions made based on these calculations.

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The tools and information on ReverseSalesTax.com are for general informational and educational purposes only. They do not constitute professional tax, legal, or financial advice. Sales tax rates change frequently — always verify with your state’s Department of Revenue or a qualified tax professional before making financial decisions. ReverseSalesTax.com is not affiliated with any government agency.

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