Break-Even Calculator
Calculate how many units you need to sell to cover your costs and break even.
Understanding fixed vs. variable costs
Fixed costs stay the same regardless of how many units you sell — rent, salaries, insurance, and equipment leases are common examples. Variable costs scale directly with production or sales volume — materials, packaging, and per-unit shipping are typical examples. Getting this split right is essential for an accurate break-even calculation.
Some costs are semi-variable (like a phone plan with a base fee plus per-minute charges) and need to be split into their fixed and variable components before plugging them into this calculator for an accurate result.
Using break-even analysis for pricing decisions
Break-even analysis is one of the most practical tools for evaluating a new product or service — it tells you concretely how many sales are needed before you start generating profit, which can inform pricing, cost-cutting priorities, or whether a business idea is viable at a given scale.
It's also useful for stress-testing pricing changes — raising your price per unit lowers the break-even point (fewer units needed), while rising variable costs raise it, which this calculator lets you explore quickly by adjusting the inputs.
Frequently asked questions
What's the difference between fixed and variable costs?
Fixed costs stay constant regardless of sales volume (like rent or salaries), while variable costs scale directly with each unit produced or sold (like materials or packaging).
What does 'contribution margin' mean?
Contribution margin is the amount each unit sold contributes toward covering fixed costs, after variable costs are subtracted — it's calculated as price per unit minus variable cost per unit.