Free Calculators

Break-Even Calculator

Find the number of sales per month that covers your fixed and variable costs exactly.

Your numbers

$
Rent, software, insurance, salaries: costs you pay even with zero sales.
$
$
Product, packaging, shipping and fees for one sale.
Your Results
Break-even sales per month-
Profit contribution per sale-
Break-even revenue-

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How is this calculated?

Each sale contributes the selling price minus its variable cost. Break-even is where those contributions add up to your fixed costs.

Contribution Per Sale = Selling Price - Variable Cost Per Sale
Break-Even Units = Fixed Costs / Contribution Per Sale
Break-Even Revenue = Break-Even Units x Selling Price

Worked Example

Fixed monthly costs: $10,000. Selling price: $50. Variable cost per sale: $30.

Contribution per sale = $50 - $30 = $20. Break-even units = $10,000 / $20 = 500 sales. Break-even revenue = 500 x $50 = $25,000.

You need approximately 500 sales per month to break even.

How to Calculate the Break-Even Point

Separate your costs into two piles. Fixed costs stay the same whether you sell one unit or a thousand: rent, insurance, software, base salaries. Variable costs happen per sale: the product, packaging, shipping and transaction fees. Subtract the variable cost from your price to get the contribution each sale makes toward the fixed pile, then divide fixed costs by that contribution.

If you sell several products at different prices, use a realistic average price and average variable cost, weighted toward your best sellers. The Revenue Calculator can help you find your average revenue per sale.

Why the Break-Even Point Matters

Break-even turns a vague worry ("am I doing okay?") into a target you can manage against: a number of sales per month, per week, even per day. It tells you how much room a discount really has, whether a new fixed cost like a lease or an employee is safe, and how far sales can fall before you start losing money.

It is also the honest way to judge growth plans. If break-even is 500 sales and you currently sell 300, the plan has to explain where 200 more sales come from before any new fixed cost is added.

How to Improve Your Numbers

Break-even falls when any of its three inputs improve: higher prices, lower variable costs, or lower fixed costs. Raising the contribution per sale is usually the fastest lever, because every extra dollar of contribution counts in full. Use the Employee Cost Calculator before adding salary to the fixed pile, so you know exactly how many extra sales a hire requires.

Frequently Asked Questions

What counts as a fixed cost?

Costs that do not change with the number of sales: rent, insurance, software subscriptions, equipment leases and base salaries. If a cost grows when sales grow, it is variable.

What if I sell many different products?

Use your average selling price and average variable cost per sale, weighted by how often each product sells. The result is an estimate, but a useful one for planning.

Does break-even include my own salary?

It should. Add the pay you need to take from the business into fixed costs. Otherwise break-even only means the business survives, not that it supports you.

How often should I recalculate break-even?

Whenever a price, a major cost or your fixed costs change, and at least a few times a year. Supplier price rises quietly move your break-even point up.

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