A product business
- Input
- £100,000 fixed, £500 price, £300 variable
- Output
- 500 units · £250,000 revenue
Each unit contributes £200. Fixed costs are covered at 500 units; every unit after that adds £200 of profit.
Break-Even Calculator
A break-even calculator works out the sales volume at which a business stops losing money. The number that drives it is contribution — what each unit adds after its own variable cost. When the price does not exceed the variable cost there is no break-even point at any volume, and this calculator says so rather than returning an infinity that looks like a number.
Runs entirely in your browser — your figures are never uploaded.
How do you calculate the break-even point?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). With £100,000 of fixed costs, a £500 price and £300 variable cost, the contribution is £200 and you must sell 500 units to break even.
£
Rent, salaries, insurance
£
£
Materials, shipping, fees
Break-even volume
500 units
£250,000 in revenue
- Contribution per unit
- £200
- Contribution margin
- 40.0%
- Units for target profit
- 500
What each sale adds to fixed costs
£
To see your margin of safety
The maths
Break-Even Calculator formula
Formula
Break-even units = Fixed costs / (Price per unit − Variable cost per unit)
- Fixed costs
- Costs that do not change with volume — rent, salaries, insurance
- Price per unit
- What you charge for one unit
- Variable cost per unit
- Cost incurred for each unit produced
Worked example
£100,000 fixed costs, £500 price, £300 variable cost per unit
Inputs
- Fixed costs
- £100,000
- Price per unit
- £500
- Variable cost per unit
- £300
Working
- Contribution per unit = 500 − 300 = £200
- Contribution margin = 200 ÷ 500 = 40%
- Break-even units = 100,000 ÷ 200
500 units, or £250,000 in revenue, to cover all costs.
How to
How to use the Break-Even Calculator
- 1
Add your fixed costs
Total everything that does not change with volume over the period — rent, salaries, software, insurance. Use a consistent period, usually a month or a year.
- 2
Enter the selling price
Put in the price per unit excluding sales tax. If you sell several products, use a weighted average or run each separately.
- 3
Enter the variable cost
Include everything incurred per unit — materials, packaging, shipping, payment processing, commission. Understating this is the most common error.
- 4
Read the contribution
Contribution per unit is what each sale adds toward fixed costs. Fixed costs divided by contribution gives the units needed.
Examples
Break-Even Calculator examples
Raising the price
- Input
- £100,000 fixed, £600 price, £300 variable
- Output
- 334 units · £200,400 revenue
A 20% price rise cuts the break-even volume by a third, because contribution rises from £200 to £300 per unit.
A price that cannot work
- Input
- £50,000 fixed, £100 price, £120 variable
- Output
- No break-even point
Each sale loses £20, so volume makes the loss worse. The calculator reports this rather than returning a meaningless figure.
Why use it
What the Break-Even Calculator gives you
Contribution made explicit
The per-unit contribution is the number that actually drives the answer, so it is shown rather than hidden inside the division.
Impossible prices flagged
When variable cost meets or exceeds price, the result is stated as having no break-even point instead of a misleading infinity.
Target profit, not just zero
Add a profit target to see the volume needed to reach it, which is usually the more useful planning number.
Commercially private
Cost structure and pricing never leave your browser.
Good to know
Break-Even Calculator limitations
- Assumes variable cost per unit is constant. Bulk discounts on materials lower it at volume, so real break-even is often slightly earlier.
- Assumes one price. Discounts, promotions and mixed channels all change the effective average.
- Fixed costs are rarely fixed forever — growth eventually requires more space, staff or equipment, which steps them up.
- Ignores timing. Break-even says nothing about whether cash arrives before the bills fall due.
Summary
Break-Even Calculator in short
- Break-even units = fixed costs ÷ (price − variable cost).
- Contribution per unit is what each sale adds toward fixed costs.
- £100,000 fixed with £200 contribution needs 500 units.
- If variable cost meets or exceeds price, no volume breaks even.
- Raising price cuts break-even volume faster than cutting fixed costs.
FAQ
Break-Even Calculator questions
What is the break-even formula?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). The denominator is the contribution per unit. Multiply the result by the price to get break-even revenue.
What is contribution margin?
Contribution per unit is price minus variable cost — what each sale adds toward fixed costs. As a percentage of price it is the contribution margin: £200 on a £500 price is 40%.
How do I tell fixed from variable costs?
Ask whether the cost changes if you sell one more unit. Rent and salaries do not, so they are fixed. Materials, shipping and payment fees do, so they are variable. Some costs are partly both.
Why does it say there is no break-even point?
Because the variable cost meets or exceeds the price, so each sale loses money and selling more increases the loss. Volume cannot fix negative contribution — only a higher price or lower cost can.
How do I find the volume for a target profit?
Add the target to fixed costs before dividing. To make £50,000 on top of £100,000 of fixed costs with £200 contribution, you need (100,000 + 50,000) ÷ 200 = 750 units.
What if I sell several different products?
Use a weighted average contribution based on your sales mix, or calculate each product separately. A blended figure is only valid while the mix holds; a shift in mix moves the break-even point.
What is the margin of safety?
The gap between current sales and break-even, as a percentage. Selling 800 units against a 500-unit break-even gives a 37.5% margin of safety — how far sales can fall before losses start.
Does this work for a service business?
Yes, with billable hours or projects as the unit. Variable cost is contractor time or delivery cost; fixed cost is everything else. The arithmetic is identical.
Is my cost structure stored?
No. Everything is computed in your browser. Cost structure and pricing are commercially sensitive, and neither is transmitted or retained.
Discover
Related calculators
Profit Margin CalculatorCalculate profit margin and markup from cost and price. The two are routinely confused — a 60% margin is a 150% markup, and both are shown.ROI CalculatorCalculate return on investment as a percentage and the annualised CAGR. Simple ROI ignores time — both figures are shown side by side.Net Worth CalculatorAdd up assets and debts to find your net worth. Groups holdings by liquidity so you can see what is actually available if needed.