A break-even analysis tells you exactly how many units you need to sell — or how much revenue you need to generate — before your business covers all costs and starts making a profit. It's an essential calculation for pricing decisions, business planning, and evaluating whether a new product or venture is financially viable.
Fixed Costs (Monthly)
Pricing & Volume
Materials, packaging, shipping per unit sold
Used to project your profit or loss
Fill in your costs and price,
then click Calculate Break-Even
How to Use the Break-Even Analysis Calculator
Understanding your break-even point is one of the most important steps in launching or running any business. This free break-even calculator does the math for you — just enter your costs and selling price to instantly see how many units you need to sell before you start making a profit.
Step 1: Add Your Fixed Costs
Fixed costs are expenses you pay every month regardless of how much you sell — things like rent, salaries, insurance, software subscriptions, and equipment payments. Click "Add item" to create a named line item for each fixed cost and enter the monthly dollar amount. You can add as many line items as needed. The total fixed costs update automatically as you type.
Step 2: Enter Variable Cost per Unit
Variable costs change based on how many units you produce or sell. Common examples include raw materials, packaging, per-unit shipping fees, and payment processing fees (like Stripe's percentage). Enter the total variable cost you incur for each individual unit sold. If you sell a service rather than a physical product, this might be zero or a small per-client cost.
Step 3: Enter Your Selling Price per Unit
Enter the price at which you sell one unit of your product or service. This is the revenue per sale before any costs. The calculator uses this to determine your contribution margin — the amount each sale contributes toward covering fixed costs and generating profit.
Step 4: (Optional) Set Expected Monthly Volume
If you have a sales forecast or target, enter the number of units you expect to sell per month. The calculator will then show you your projected monthly profit or loss at that volume, and display a progress bar showing how close you are to — or how far above — your break-even point.
Step 5: Read Your Results
After clicking Calculate, you will see four key numbers: Break-Even Units (the minimum monthly sales needed to cover all costs), Break-Even Revenue (the revenue equivalent), Contribution Margin per Unit (profit contribution from each sale), and Contribution Margin % (the percentage of each dollar of revenue available to cover fixed costs and profit). The break-even chart shows the visual intersection of your revenue and total cost lines — the point where they cross is your break-even point.
Understanding the Break-Even Chart
The chart plots three lines across a range of unit volumes. The grey horizontal line represents fixed costs — they do not change with volume. The orange line is total costs (fixed plus variable), which rises as volume increases. The green line is revenue, also rising with volume. Where the green and orange lines intersect is your break-even point. To the left of that point you are losing money; to the right you are profitable.
FAQ
What is break-even analysis?
Break-even analysis is a financial calculation that tells you how many units you must sell — or how much revenue you must generate — before your business covers all its costs and starts making a profit. It's one of the most fundamental tools in business planning and pricing strategy.
How is the break-even point calculated?
The break-even point in units equals total fixed costs divided by the contribution margin per unit. The contribution margin per unit is the selling price minus the variable cost per unit. Break-even revenue is simply the break-even units multiplied by the selling price.
What are fixed costs vs. variable costs?
Fixed costs are expenses that stay the same regardless of how many units you produce or sell — such as rent, salaries, insurance, and equipment leases. Variable costs change in proportion to output, such as raw materials, packaging, and sales commissions. Understanding both is essential for accurate break-even analysis.
What is contribution margin?
Contribution margin is the amount each unit sold contributes toward covering fixed costs and then generating profit. It equals selling price minus variable cost per unit. A higher contribution margin means you need fewer sales to break even. The contribution margin percentage shows what fraction of each revenue dollar covers fixed costs and profit.
Is this break-even calculator free?
Yes, this break-even analysis calculator is completely free with no signup, no account, and no limits. You can add as many fixed cost line items as you need, adjust inputs, and recalculate as many times as you like. All calculations happen in your browser — nothing is stored or sent to any server.
What does the profit/loss result mean?
When you enter expected units sold per month, the calculator shows your projected monthly profit or loss at that volume. A positive number means you are above break-even and generating profit. A negative number means you are still below break-even and losing money at that sales level.
How can I lower my break-even point?
There are three ways to lower your break-even point: reduce fixed costs (negotiate rent, cut overheads), reduce variable costs per unit (better supplier deals, improve efficiency), or increase your selling price (if the market allows). Even small changes can have a significant effect — try adjusting the inputs to see the impact.