Break-Even Calculator - Find Your Break-Even Point

The break-even point is the sales volume at which total revenue equals total costs — meaning you make neither a profit nor a loss. Any sales below this point result in a loss; any sales above it generate a profit. Knowing your break-even point is essential for pricing, budgeting, and evaluating the viability of a business or product.

Contribution margin is the amount each unit sale contributes toward covering fixed costs and generating profit. It is calculated as: Selling Price − Variable Cost per Unit. For example, if you sell a product for $50 and it costs $30 to produce, your contribution margin is $20 per unit. The contribution margin ratio expresses this as a percentage of the selling price: $20 / $50 = 40%.

Fixed costs stay the same regardless of how many units you produce or sell — examples include rent, salaries, insurance, and loan repayments. Variable costs change directly with production volume — examples include raw materials, packaging, direct labor per unit, and shipping. Understanding the distinction is critical for accurate break-even analysis and pricing decisions.

There are three main levers: (1) Reduce fixed costs — negotiate lower rent, streamline operations, or cut overhead. (2) Reduce variable costs — find cheaper suppliers, improve production efficiency, or reduce waste. (3) Increase selling price — if the market allows, a higher price means each sale contributes more margin, so fewer units are needed to break even. Use this calculator to test each scenario.