Free break-even calculator 2026. Calculate break-even point in units and revenue, contribution margin per unit, margin of safety, and target profit units. Worked examples for retail, SaaS, and services businesses.
Enter your monthly fixed costs — rent, salaries, insurance, software subscriptions. These don't change with sales volume.
Enter your variable cost per unit — materials, direct labor, shipping, payment processing fees. These scale with each unit sold.
Enter your selling price per unit. Must be greater than variable cost for break-even to be possible.
Enter your average monthly units sold. Used to calculate time-to-break-even and current profitability.
Optionally enter a target profit (e.g., $5,000/month) to see how many units you need to sell to hit that target.
Click "Calculate" to see break-even units, break-even revenue, contribution margin, and margin of safety.
Break-even analysis identifies the sales volume at which total revenue equals total costs — neither profit nor loss. The key concept is contribution margin: every unit sold contributes its margin toward covering fixed costs. Once fixed costs are covered, each additional unit sold generates pure profit equal to its contribution margin. Margin of safety measures how much sales can drop before you fall below break-even — a critical risk metric for any business.
A retail store has $15,000/month in fixed costs (rent, salaries, utilities), buys products for $40 wholesale, and sells them for $80. Contribution margin = $80 − $40 = $40. Break-even units = $15,000 / $40 = 375 units/month. Break-even revenue = 375 × $80 = $30,000/month. If they sell 500 units/month, profit = (500 − 375) × $40 = $5,000/month. Margin of safety = (500 − 375) / 500 = 25%.
A SaaS company has $50,000/month fixed costs (salaries, hosting, marketing), $5 variable cost per customer (support, infrastructure), and $100/month subscription price. Contribution margin = $95/customer. Break-even customers = $50,000 / $95 = 526 customers. Break-even revenue = 526 × $100 = $52,632/month. At 1,000 customers, profit = (1,000 − 526) × $95 = $45,030/month.
A restaurant has $25,000/month fixed costs (rent, kitchen staff, utilities), $12 variable cost per meal (food, beverages), and $30 average ticket. Contribution margin = $18/meal. Break-even meals = $25,000 / $18 = 1,389 meals/month = 46/day. At 100 meals/day (3,000/month), profit = (3,000 − 1,389) × $18 = $29,000/month gross. Restaurants typically run at 60-70% capacity utilization, so break-even is at 65% × 1,389 = ~900 meals/month for viability.
A manufacturer has $100,000/month fixed costs (factory lease, equipment, salaried staff), $25 variable cost per unit (raw materials, direct labor), and $50 wholesale price. Contribution margin = $25. Break-even units = $100,000 / $25 = 4,000 units/month. At 6,000 units sold, profit = (6,000 − 4,000) × $25 = $50,000/month. Margin of safety = (6,000 − 4,000) / 6,000 = 33% — they can lose 1/3 of sales before hitting break-even.
A consultant has $8,000/month fixed costs (office, software, marketing), $50 variable cost per engagement (travel, materials), and $150 hourly rate. Contribution margin = $100/hour. Break-even = $8,000 / $100 = 80 billable hours/month = ~20 hours/week. At 30 billable hours/week (130/month), profit = (130 − 80) × $100 = $5,000/month. Consultants should target 60-70% billable utilization to stay profitable.
Find answers to the most common questions about break-even calculator.
Break-even analysis is a financial calculation that determines the sales volume (in units or revenue) at which total revenue equals total costs — the point of zero profit and zero loss. It is a critical tool for pricing decisions, business planning, and risk assessment. The formula uses contribution margin (selling price minus variable cost) to determine how many units must be sold to cover fixed costs. Below break-even, the business loses money; above break-even, each additional unit sold generates pure profit equal to its contribution margin.
Contribution margin is the amount each unit sold contributes toward covering fixed costs (and generating profit after fixed costs are covered). Formula: Contribution Margin = Selling Price − Variable Cost per Unit. For a product sold at $100 with $40 variable cost, contribution margin = $60/unit. If fixed costs are $30,000/month, break-even = $30,000 / $60 = 500 units. After 500 units, each additional unit adds $60 to profit. Contribution margin can also be expressed as a percentage of selling price ($60/$100 = 60%).
Margin of safety measures how much sales can drop before a business falls below break-even. Formula: Margin of Safety = (Actual Sales − Break-Even Sales) / Actual Sales × 100. A business selling 1,000 units/month with break-even at 700 has a 30% margin of safety — sales can drop 30% before hitting break-even. Investors and lenders typically look for 20%+ margin of safety as a sign of business resilience. A margin of safety under 10% indicates high risk — small sales drops can push the business into losses.
Multi-product break-even uses a weighted-average contribution margin. Steps: (1) Calculate contribution margin for each product. (2) Determine the sales mix (e.g., 60% Product A, 40% Product B). (3) Weight the contribution margins by the mix: WACM = 0.60 × CM_A + 0.40 × CM_B. (4) Divide total fixed costs by WACM to get break-even in units. (5) Multiply break-even units by the mix percentages to get break-even units per product. This assumes a constant sales mix, which may not hold in reality.
Fixed costs do not change with sales volume — rent, salaries, insurance, software subscriptions. Variable costs scale directly with each unit sold — materials, direct labor, shipping, payment processing fees. Some costs are "mixed" (semi-variable): utilities (fixed base + usage), sales commissions (fixed base + per-unit). For break-even analysis, mixed costs should be split into their fixed and variable components using the high-low method or regression analysis.
Break-even analysis reveals the minimum price at which a business can profitably sell. If break-even at $80 price is 500 units but market demand caps sales at 400 units, the business must either (a) raise price to reduce break-even units, (b) reduce variable costs to increase contribution margin, or (c) reduce fixed costs. Break-even also helps evaluate discount strategies: a 10% price cut requires selling 25% more units to maintain the same profit (because contribution margin shrinks).
Target profit break-even calculates the sales volume needed to achieve a specific profit goal. Formula: Units Needed = (Fixed Costs + Target Profit) / Contribution Margin per Unit. For $10,000/month target profit with $15,000 fixed costs and $40 contribution margin: ($15,000 + $10,000) / $40 = 625 units. This is the same as treating target profit as an "additional fixed cost" that must be covered by contribution margin.
Recalculate break-even whenever: (1) fixed costs change (new lease, hiring, software), (2) variable costs change (supplier price increases, labor rate changes), (3) pricing changes (promotions, price increases), or (4) product mix shifts (introducing a new product with different margins). Most businesses should review quarterly and after any major business change. Many SaaS dashboards (ProfitWell, Baremetrics) calculate break-even automatically from financial data.
Calculations and computational models on QuickBizCalc are verified against published regulatory standards and statutory tax tables:
Publication 15-T (Federal Income Tax Withholding Methods) & Publication 15 (Employer's Tax Guide).
Fair Labor Standards Act (FLSA 29 U.S.C. § 207) regulations on overtime hours, recordkeeping, and minimum wage.
OASDI taxable maximum wage base limits and statutory FICA tax rates (6.2% Social Security + 1.45% Medicare).
Peer-reviewed by credentialed CPAs and SPHR consultants. For specific advice, consult a licensed tax attorney or accountant.
