Break-Even Calculator
Calculate how many units you need to sell to cover your costs. Essential for business planning.
What the break-even point tells you
Your break-even point is the exact level of sales where total revenue equals total costs — the moment your business stops losing money and is about to start making a profit. Below it you're running at a loss; above it, every extra sale adds to profit.
Knowing this number lets you set realistic sales targets, price your product with confidence, judge whether a new venture is viable, and see how much cushion you have before you slip into the red.
The break-even formula
Break-even point (in units) = Fixed Costs ÷ (Price per unit − Variable cost per unit).
The bottom part — price minus variable cost — is your contribution margin: the amount each sale contributes toward covering fixed costs. Once those contributions add up to your fixed costs, you've broken even. Multiply the break-even units by your price to get break-even revenue, the sales figure you need to hit.
A worked example
Say your fixed costs are ₹100,000 a month (rent, salaries, subscriptions). You sell a product for ₹500, and each one costs ₹300 in materials and shipping. Your contribution margin is ₹500 − ₹300 = ₹200 per unit.
Break-even = ₹100,000 ÷ ₹200 = 500 units per month, or ₹250,000 in revenue. Sell 500 units and you cover everything; unit 501 is where profit begins.
How to lower your break-even point
Three levers move it: raise your price, cut the variable cost per unit, or reduce fixed costs. Each one either widens your contribution margin or shrinks the fixed base you must cover, so you break even on fewer sales. Even a small price increase or a supplier discount can pull the break-even point down noticeably.
Frequently Asked Questions
What is the break-even point?
It's the number of units — or amount of revenue — at which total sales exactly cover total costs, with no profit and no loss. Sell more than this and you profit; sell less and you lose money.
What is the break-even formula?
Break-even units = Fixed Costs ÷ (Price per unit − Variable cost per unit). Break-even revenue = break-even units × price per unit.
What is contribution margin?
It's your selling price minus the variable cost of one unit — the money each sale contributes toward paying off fixed costs. A higher contribution margin means you break even on fewer sales.
What's the difference between fixed and variable costs?
Fixed costs stay the same however much you sell — rent, salaries, insurance, software. Variable costs rise with each unit — raw materials, packaging, shipping, payment fees. The calculator needs both to find your break-even point.
How can I lower my break-even point?
Increase your price, reduce the variable cost per unit with cheaper materials or suppliers, or cut fixed costs. Any of these widens your contribution margin so you break even on fewer sales.
Does the break-even calculation include tax?
No. Break-even analysis uses pre-tax operating costs and revenue. Taxes apply to profit, which only starts building up after you pass the break-even point.
Is the break-even calculator free?
Yes — free, no signup, and it shows your break-even point instantly with a chart as you type.