What next?
Break-even is a volume. These set the price and the margin behind it.
What your result means
The break-even point is the sales volume at which total revenue exactly covers total costs — one unit more and you are profitable. Contribution per unit is what each sale contributes toward the fixed costs after its own variable cost is paid; it is the engine of the whole calculation. If contribution is zero or negative, no volume will ever break even.
Why this one is different
Contribution per unit is exposed as its own figure, because that single number — price minus variable cost — is what the whole calculation turns on. The break-even point is given in units and in revenue, and a target-profit box answers the question owners actually ask: how many more do I need to sell to clear a specific sum.
Break-even tells you which lever to pull
If break-even feels unreachable, there are only three moves: raise the price, cut the variable cost per unit, or cut fixed costs. Volume is not on that list — selling more of something with no contribution only loses money faster.
Recalculating break-even after any price change is the fastest sanity check in business planning. A 10% price rise often cuts the required volume by far more than 10%, because all of it drops straight into contribution.
How it works
Each sale generates a contribution equal to price minus variable cost. Fixed costs stay the same regardless of volume, so break-even is simply the number of contributions needed to pay them off. Adding a target profit to the fixed costs gives the volume needed to earn it.
How to use this calculator
- Choose your currency.
- Enter fixed costs for the period — rent, salaries, insurance, software.
- Enter the selling price per unit.
- Enter the variable cost per unit — materials, packaging, per-sale fees.
- Optionally add a target profit to see the volume that reaches it.
Formula
F = fixed costs, P = price per unit, V = variable cost per unit. For a target profit, use (F + profit) ÷ (P − V).
Example calculation
£12,000 of fixed costs, selling at £45 with a £18 variable cost:
Break-even = 445 units
Break-even revenue ≈ £20,000
Frequently asked questions
What counts as a fixed cost?＋
Anything that does not change with the number of units sold in the period: rent, permanent salaries, insurance, subscriptions, loan repayments. Costs that scale with volume — materials, shipping, card fees, commission — are variable.
What if I sell several products?＋
Use a weighted average contribution across your sales mix, or run the calculation per product line and allocate a share of fixed costs to each. Break-even for a whole business is only meaningful if the mix stays stable.
Does break-even include tax?＋
No. It is a pre-tax operating figure. Tax applies to profit above break-even, so add it to your target profit if you want an after-tax volume.
What is the difference between break-even units and break-even revenue?＋
Units tell you how many you must sell; revenue tells you how much you must take. Units are more useful when you sell one product at one price. Revenue is more useful across a mixed range, where the meaningful figure is total sales value rather than a count of items.
How does a price change move the break-even point?＋
More sharply than most people expect, because raising the price increases the contribution from every unit while fixed costs stay put. A small price rise can cut the break-even volume substantially — which is why price is usually a more powerful lever than cost reduction, when the market will bear it.
Should I include my own salary as a fixed cost?＋
If you need to draw an income from the business, yes. Leaving it out produces a break-even point the business can clear while leaving you unpaid, which is not really breaking even. Include a realistic figure for your own time and the number becomes an honest one.
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Assumptions & limitations
Every figure here comes from a simplified model. Keep these limits in mind when reading your result:
- Assumes price and variable cost per unit are constant at every volume — bulk discounts break this.
- Fixed costs are treated as genuinely fixed across the whole range, which fails once you need more capacity.
- Ignores timing: break-even in units says nothing about cash flow or when payment arrives.
- Excludes tax and one-off exceptional costs.