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Break Even Calculator
Find how many units and how much revenue you need to cover your costs, and see where revenue overtakes cost. Enter your numbers and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Revenue vs total cost
Revenue Total cost
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How break-even analysis works
Every business has fixed costs that stay the same no matter how much you sell, such as rent and salaries, and variable costs that rise with each unit, such as materials. The break-even point is where the money you collect finally covers both. The chart above shows the revenue line crossing the total cost line at exactly that point.
The key number is the contribution margin, the price minus the variable cost per unit. Dividing fixed costs by that margin tells you how many units you must sell before you stop losing money and start earning profit.
A quick example
Suppose fixed costs are $20,000, you sell each unit for $50 and each costs $30 to make. The contribution margin is $20, so you break even at 1,000 units, which is $50,000 in sales. Unit number 1,001 starts adding $20 of profit.
Things to keep in mind
Break-even is a planning tool, not a guarantee. Real fixed costs can step up as you grow, and prices or material costs may change. For more on small business finances, the U.S. Small Business Administration is a useful resource. You can model more scenarios with our other free calculators.
Frequently asked questions
What is the break-even point?
The break-even point is the level of sales where total revenue exactly equals total cost, so you make neither a profit nor a loss. Below it you lose money, above it you start earning profit on each extra unit sold.
How do you calculate break-even units?
Divide your total fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit. The result is how many units you must sell to cover all your costs.
What is contribution margin?
Contribution margin is the money left from each sale after paying that unit's variable cost. It is what is available to cover fixed costs and, once those are covered, to become profit. A higher margin means you break even sooner.
Why does the calculator need a price above variable cost?
If the price does not exceed the variable cost, each sale loses money and no amount of volume ever covers your fixed costs, so there is no break-even point. You would need to raise the price or cut the variable cost first.
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