Before you price a product, launch a service, or commit to a business idea, you need to know one number: how many units (or how much revenue) you need to cover your costs. That's the break-even point. Everything above it is profit; everything below it is a loss.
Step 1. Enter your total monthly or annual fixed costs — expenses you pay regardless of how much you sell.
Step 2. Enter your price per unit and variable cost per unit.
Step 3. The calculator shows the units needed to break even and the revenue required to reach that point.
With the default inputs loaded in the form, the calculator produces a starting result you can use as a baseline. Change one field at a time to compare a new scenario.
The break-even formula is straightforward: divide your total fixed costs by the contribution margin (price minus variable cost per unit). If you sell a product for $50, it costs $20 to make, and you have $9,000 in monthly fixed costs, your contribution margin is $30 and your break-even is 300 units. Sell fewer than 300 and you lose money; sell more and you make it.
Fixed costs include rent, salaries, insurance, and any expense that doesn't change with your sales volume. Variable costs include materials, direct labor for each unit, packaging, and transaction fees. Getting this split right is essential — misclassifying a variable cost as fixed (or vice versa) can make your break-even analysis significantly wrong.
Break-even analysis is most useful when you're evaluating a price change, a new product, or a marketing campaign. Running the numbers at different price points shows you how pricing affects how quickly you reach profitability — and whether a lower price can be compensated by higher volume.
For a multi-product business, use a weighted average contribution margin. Multiply each product's contribution margin by its percentage of total sales, add the results, and use that blended margin in the formula.
Define 'units' as hours of service, client contracts, or projects. If you charge $150/hour and each hour costs you $40 in direct costs (your time, software, etc.), your contribution margin per hour is $110. Divide fixed costs by $110 to find the hours needed to break even.
It depends on whether you pay yourself a fixed salary or take distributions. If you pay yourself a fixed salary, include it in fixed costs. If you take profits as distributions, it won't appear in the break-even calculation — reaching break-even means covering business costs, not your personal income.
Enter your monthly income and key expense categories to instantly see your surplus, deficit, and savings rate.
Add up your assets and liabilities to calculate your real net worth — the true measure of your financial position.
Calculate your emergency fund target based on monthly expenses and see exactly how much more you need to save.
See your monthly cash flow by comparing income against fixed expenses, variable expenses, and savings allocations.
Disclaimer: Results from this calculator are for informational and planning purposes only and do not constitute financial, legal, or professional advice. Always verify important calculations with a qualified professional.
