How do I calculate the break-even point?

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With 3,000 of fixed costs, a price of 25 and a variable cost of 10, you need 200 units a month.

What is contribution margin?

What each sale leaves to pay fixed costs and then profit: the price minus the variable cost. As a percentage, divide it by the price.

What is the margin of safety?

How far sales can fall before you make a loss, as a share of your current sales. A higher number means a bigger cushion.

Does it work for services?

Yes. Use an hour, a job or a customer as the unit, with the costs that come with each one.

Free tool

How much do you need to sell to cover your costs?

Enter your monthly fixed costs, your price and the cost of each sale. See your break-even point, what a profit target takes, and your safety margin.

You get

Break-even units and sales, contribution margin, units for a profit target, margin of safety and a chart.

Setting prices? Try the profit margin calculator.

Currency

Fixed costs per month ($)Rent, salaries, software, loan payments: costs that stay the same however much you sell.

Selling price per unit ($)Per product, job, hour or customer.Variable cost per unit ($)Materials, delivery, card fees, commission.

Profit target per month ($, optional)Units you sell now per month (optional)

Result

Break-even units / month: 200
Break-even sales / month: $5,000
Contribution per unit: $15
Contribution margin: 60.0%

About 7 a day, or 47 a week.

SalesTotal costsShaded: profit

Units	Sales	Profit
100	$2,500	−$1,500
150	$3,750	−$750
200	$5,000	$0
250	$6,250	$750
300	$7,500	$1,500
400	$10,000	$3,000

Break-even units = fixed costs ÷ (price − variable cost). Free, no sign-up, nothing stored. Leave out tax: enter prices without VAT or GST.

Why it matters

Every month starts at a loss. The question is which sale gets you back to zero.

Fixed costs like rent and salaries arrive whatever you sell. Each sale chips away at them by its price minus its own cost. Knowing the number lets you set targets, test a price change, or see what a new cost really takes.

How do I calculate the break-even point?: Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With 3,000 of fixed costs, a price of 25 and a variable cost of 10, you need 200 units a month.
What is contribution margin?: What each sale leaves to pay fixed costs and then profit: the price minus the variable cost. As a percentage, divide it by the price.
What is the margin of safety?: How far sales can fall before you make a loss, as a share of your current sales. A higher number means a bigger cushion.
Does it work for services?: Yes. Use an hour, a job or a customer as the unit, with the costs that come with each one.
Spending too long on admin to grow?: The AI Cost Review finds the admin that AI and simple automation could take off your hands, and what it would cost to run.

Want to lower the costs you have to cover?

Automating routine work cuts the fixed costs every sale has to pay for. We can show you where to start.

Start a project Fixed-price checks