Break-Even Calculator: Find Your Break-Even Point
Financial Calculators
Calculate your break-even point in units and revenue. Enter fixed costs, variable costs, and selling price to see when your business becomes profitable.
Rent, salaries, insurance, etc.
Cost that changes with each unit produced.
Revenue per unit sold.
How many units you need to hit this profit.
Enter projected or actual sales to see profit and margin of safety.
What is the break-even point?
The break-even point (BEP) is the sales volume at which total revenue equals total costs - the point where a business neither profits nor loses money. Every unit sold beyond the BEP generates profit.
The formulas
Break-even (units) = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit)
Contribution Margin Ratio = (Price − Variable Cost) ÷ PriceKey terms
- Fixed costs: costs that don't change with output - rent, salaries, insurance, equipment loans.
- Variable costs: costs that change with each unit produced - raw materials, packaging, direct labor.
- Contribution margin: the amount each unit contributes to covering fixed costs after variable costs are paid (Price − Variable Cost).
Break-even chart
A break-even chart plots two lines against unit volume:
- Revenue line: starts at zero and slopes upward at the selling price per unit.
- Total cost line: starts at the fixed cost (y-intercept) and slopes upward at the variable cost per unit.
The break-even point is where the two lines intersect. To the left of the intersection the business is losing money (costs exceed revenue); to the right it is profitable.
Margin of safety
The margin of safety is the gap between actual (or projected) sales and the break-even point. It answers: "How much can sales fall before we start losing money?"
Enter expected or actual unit sales in the calculator to see the margin of safety in units, sales dollars, and as a percentage of expected revenue. The dollar measure compares expected revenue with break-even revenue; a negative result means sales are below break-even.
Margin of Safety (units) = Expected Units − Break-even Units
Margin of Safety ($) = Expected Revenue − Break-even Revenue
Margin of Safety (%) = Margin of Safety ($) ÷ Expected RevenueA larger margin of safety means the business can absorb demand shocks without turning unprofitable. Expressed as a percentage of actual sales, it is a key indicator in financial planning and risk management.
Expected-sales profit uses (Price − Variable Cost) × Units − Fixed Costs. When
expected sales are below break-even, the result calls out the estimated loss so you can
compare the sales plan with the break-even volume directly.
Sensitivity analysis
Break-even analysis becomes more useful when you test how changes in assumptions shift the BEP:
- +10% fixed costs: the break-even unit count increases proportionally. If you currently break even at 1,000 units with $10,000 in fixed costs, a $1,000 rent increase raises the BEP to 1,100 units (assuming a $10 contribution margin).
- −5% selling price: reduces contribution margin, requiring more units to break even. Price sensitivity is often the highest-impact variable in retail and software businesses.
- +10% variable costs: increases the slope of the cost line, narrowing the contribution margin and raising the BEP.
Running multiple scenarios side-by-side gives a practical range for how robust your business model is to common real-world changes. The table varies one assumption at a time and keeps the others at their current values. If a price or variable-cost change makes contribution margin zero or negative, that scenario is marked impossible because selling more units cannot cover fixed costs.