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BREAK-EVEN CALCULATOR

Break-even Calculator — Units & Revenue to Cover Costs

Free break-even calculator for US businesses, startups, and product teams. Enter fixed costs, variable cost per unit, and selling price to find your break-even point in units and revenue, with margin of safety and what-if scenarios.

1. Cost & Price Details

Rent, salaried payroll, insurance, software — costs that don't change with production.
Materials, direct labor, shipping, transaction fees per unit.
The price a customer pays for one unit.
Optional: the pre-tax profit you want to earn.

2. Optional Variables

Optional: if target profit above is after-tax, enter the tax rate to gross it up.
Optional: to compute margin of safety.

3. Reference & Notes

BREAK-EVEN ANALYSIS

Cost-Volume-Profit Analysis

Reference: BE-2026-001
Date:
Fixed Costs $50,000.00
Variable Cost/Unit $25.00
Selling Price/Unit $50.00
Break-even Units 2,000
Break-even Revenue $100,000.00
Contribution Margin $25.00
Contribution Margin Ratio 50.0%
Units for Target Profit 2,000

Breakdown Analysis

Fixed Costs $50,000.00
Contribution/Unit $25.00
Break-even Units 2,000
Break-even Revenue $100,000.00

What-If Analysis

10% Price Increase 1,667 Units
10% Variable Cost Decrease 1,818 Units
20% Fixed Cost Increase 2,400 Units

Break-even Methodology

Break-even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)

$50,000.00 ÷ ($50.00 − $25.00) = 2,000 Units

You need to sell 2,000 units to break even. At that level, total revenue equals total costs.

Notes

Break-even analysis for business planning

This calculation is for informational and educational purposes. Break-even analysis assumes fixed and variable costs remain constant across the relevant range of production. Consult a licensed accountant or CPA for business-specific guidance.
Prepared By
Date
GUIDE

How to Use This Break-even Calculator

This free break-even calculator finds the number of units and the total revenue you need to cover both fixed costs and variable costs. Enter your fixed costs, your variable cost per unit, and your selling price per unit, and the calculator returns your break-even point, your contribution margin, and your contribution margin ratio. If you already know your monthly sales volume, add it to see your margin of safety. For a full profitability picture, run these numbers alongside our profit margin calculator and, once you have multi-year projections, our NPV calculator.

1

Enter Fixed Costs

Rent, salaried payroll, insurance, and other costs that don't change with how many units you produce or sell.

2

Enter Cost and Price per Unit

Variable cost per unit (materials, direct labor, shipping) and the selling price per unit a customer pays.

3

Set Target Profit (Optional)

Enter a pre-tax profit target to see the units required to reach it, or leave at 0 to see the pure break-even point.

4

Add Current Volume (Optional)

Enter your current monthly units sold to compute margin of safety — how much sales can fall before you hit break-even.

5

Save, Print or Export

Save a draft in your browser, print the results, or download a PDF of the analysis for your records.

BREAK-EVEN EDUCATION

What Does a Break-even Calculator Calculate?

A break-even calculator — sometimes called a break-even point calculator or cost-volume-profit calculator — converts your cost structure into the sales level where profit is zero. It's the foundation of product pricing, launch planning, and business viability analysis. The calculator also computes financial metrics that help you understand how much room the business has before it starts losing money.

Key break-even calculations

  • Contribution Margin per Unit: Selling price − variable cost per unit. The dollars each sale contributes toward fixed costs and profit.
  • Contribution Margin Ratio: Contribution margin ÷ selling price × 100. The percentage of each sales dollar available to cover fixed costs.
  • Break-even Units: Fixed costs ÷ contribution margin per unit. The number of units you must sell to break even.
  • Break-even Revenue: Break-even units × selling price. The dollar sales needed to break even.
  • Units for Target Profit: (Fixed costs + pre-tax target profit) ÷ contribution margin per unit.
  • Margin of Safety: (Current sales − break-even sales) ÷ current sales × 100. The cushion before losses begin.
  • What-if Analysis: How break-even changes with a 10% price increase, 10% variable cost decrease, or 20% fixed cost increase.

Who can use this break-even calculator?

  • Small Business Owners: Set realistic sales targets and pricing floors.
  • Startups and Founders: Validate unit economics before scaling.
  • Product Managers: Model new product launches against cost structure.
  • Retail and E-commerce Sellers: Determine minimum units per SKU to cover costs.
  • Accountants and Business Advisors: Provide a transparent cost-volume-profit benchmark for clients.
METHODOLOGY

Break-even Calculator Methodology

MoneyTool uses the standard cost-volume-profit (CVP) formulas taught in financial accounting and managerial economics. The calculator is transparent about what each metric does and does not capture.

1. Contribution margin per unit

Contribution Margin = Selling Price − Variable Cost per Unit

The dollars each unit contributes toward covering fixed costs and generating profit.

2. Contribution margin ratio

CM Ratio = (Contribution Margin ÷ Selling Price) × 100

The share of each sales dollar available to cover fixed costs. A higher ratio means more leverage per sale.

3. Break-even units

Break-even Units = Fixed Costs ÷ Contribution Margin per Unit

Units are always rounded up to the nearest whole unit — rounding down would put you below the true break-even point.

4. Break-even revenue

Break-even Revenue = Break-even Units × Selling Price

5. Units for target profit

Target Units = (Fixed Costs + Pre-Tax Target Profit) ÷ Contribution Margin per Unit

If you enter an after-tax target profit and a tax rate, the calculator grosses it up using:

Pre-Tax Target = After-Tax Target ÷ (1 − Tax Rate)

6. Margin of safety

Margin of Safety % = ((Current Units − Break-even Units) ÷ Current Units) × 100

A higher margin of safety means the business can absorb a larger sales decline before turning unprofitable.

Important assumptions

  • Fixed costs are constant across the relevant range of production.
  • Variable cost per unit is constant — no volume discounts or learning-curve effects.
  • Selling price per unit is constant — no promotions or tiered pricing.
  • The product mix is fixed (single-product analysis).
  • Inventory levels are assumed stable (production = sales).
  • This is an educational snapshot, not a formal cost accounting statement.
E-E-A-T & SOURCES

Break-even Information, Sources & Editorial Review

MoneyTool separates calculation results from business education and personalized planning. The calculator uses standard CVP formulas, while external business guidance should be verified with authoritative sources.

Author and editorial responsibility

Methodology reviewed by the MoneyTool Finance Expert Team, a group of accountants, CPAs, and personal-finance analysts who maintain MoneyTool's calculator library and financial education content.

Last reviewed: | Cost-volume-profit methodology

Next review: When calculation logic, supported inputs, or relevant guidance changes.

Authoritative U.S. business and accounting resources

  • U.S. Small Business Administration (SBA) — Business Guide: SBA Business Guide covers planning, launching, managing, and growing a US small business.
  • U.S. Small Business Administration — Finance your business: SBA Fund Your Business explains how to estimate costs and financing needs.
  • SCORE (SBA resource partner): SCORE Free Business Mentoring offers free mentoring and templates including break-even worksheets.
  • U.S. Small Business Administration — Lender Match: SBA Lender Match connects businesses with participating lenders.
  • Internal Revenue Service (IRS) — Small Business and Self-Employed: IRS Small Business Tax Center covers deduction and business-expense treatment that affect cost inputs.
  • Financial Accounting Standards Board (FASB): FASB is the authoritative source for US GAAP that governs financial reporting of costs.
  • U.S. Securities and Exchange Commission (SEC) — Small Business: SEC Small Business Resources provides guidance for small businesses raising capital.
  • Federal Trade Commission (FTC) — Business Guidance: FTC Business Guidance covers advertising, pricing, and consumer protection rules that affect pricing decisions.

External resources are provided for education and verification. MoneyTool is not affiliated with or endorsed by the SBA, IRS, FASB, SEC, FTC, SCORE, or any government agency linked from this page.

SMART BUSINESS PLANNING

Tips for Using Break-even Analysis

Break-even analysis is most useful when combined with realistic cost estimates and regular review. Focus on the variables with the biggest impact.

Update Regularly

Re-run the analysis when material costs, wages, or rent change — those shift break-even immediately.

Include All Costs

Missing a fixed cost (insurance, SaaS subscriptions, compliance) understates the break-even point and misleads planning.

Test Sensitivity

Use the what-if panel to see how break-even shifts with a 10% price change or a 20% fixed-cost increase.

Watch the Margin of Safety

A margin of safety below 20% means small demand swings can push you into losses — build a buffer.

Pair with Pricing

Break-even is sensitive to price. Small price increases often lower break-even more than cost cuts do.

Consult a CPA

For multi-product businesses or tax-sensitive planning, work with a CPA to model the cost structure accurately.

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FAQ

Frequently Asked Questions About Break-even Analysis

What is a break-even point?

The break-even point is the level of sales where total revenue equals total costs. At this level, there is no profit and no loss.

How is the break-even point calculated?

Break-even units equals fixed costs divided by the contribution margin per unit, which is selling price minus variable cost per unit. Break-even revenue equals break-even units multiplied by selling price.

What is contribution margin?

Contribution margin is the difference between the selling price per unit and the variable cost per unit. It represents the dollars per unit available to cover fixed costs and generate profit.

What is margin of safety?

Margin of safety is the percentage by which current or projected sales exceed the break-even point. A higher margin of safety means the business has more cushion against a sales decline.

Does the break-even point include taxes?

Break-even is a pre-tax concept. When a target profit is after-tax, divide that target by one minus the tax rate to find the pre-tax profit required to reach it.

Is this break-even calculator free?

Yes. MoneyTool provides this break-even calculator free for educational and planning use.

Can I save my break-even analysis?

Yes. Save Draft stores the calculator inputs in your browser. Print Results and Download PDF can be used to keep a copy of the displayed analysis.

LEGAL

Break-even Calculator Disclaimer

This break-even calculator provides estimates for informational and educational purposes. It does not constitute financial, legal, tax, accounting, or investment advice. Break-even analysis assumes fixed and variable costs remain constant across the relevant range of production; actual results vary by business.

  • Estimates only: Results depend on the inputs and assumptions described in the methodology.
  • Not a cost accounting statement: This is an educational calculator, not a certified cost accounting report.
  • Single-product analysis: Real businesses with multiple products require product-mix-weighted CVP analysis.
  • Verify with a professional: For complex situations, consult a licensed CPA or financial advisor.
Last methodology review: . Calculator logic and educational content should be reviewed again whenever the methodology, supported inputs, or relevant external guidance changes.