Break-Even Point Calculator
Find exactly how many units — or billable hours — you need to sell to cover your costs before you make a profit. Enter fixed costs, price and variable cost per unit.
Open the free Break-Even Calculator →How it works
The break-even point is the level of sales at which your total revenue exactly equals your total costs — the moment you stop losing money and start making a profit. To find it you only need three numbers: your fixed costs (everything you pay regardless of sales, like rent, software and insurance), your price per unit, and your variable cost per unit (what each sale costs you in materials, fees or subcontracting).
The break-even formula is simple. First work out your contribution margin — the profit each sale contributes after variable costs: price − variable cost per unit. Then divide your fixed costs by that margin:
Break-even units = fixed costs ÷ (price − variable cost per unit)
Multiply the answer by your price to get the break-even point in revenue. Freelancers and service businesses can run the same break-even analysis on time: treat one billable hour as one unit, use your hourly rate as the price, and subtract any per-hour cost. Everything is calculated instantly in your browser — nothing is uploaded.
Worked example
Say you run a small product business with $5,000 in monthly fixed costs (rent, software and insurance). You sell each item for $50, and each item costs you $20 in materials and shipping.
- Contribution margin per unit = $50 − $20 = $30
- Break-even units = $5,000 ÷ $30 = 166.7 → round up to 167 units
- Break-even revenue = 167 × $50 = $8,350
So you must sell 167 units (about $8,350 in sales) each month just to cover costs. Unit 168 is your first profitable sale, adding $30 of profit. If you raised the price to $60, the margin jumps to $40 and break-even falls to 125 units — which is exactly why the calculator updates the answer the moment you change any input.
Frequently asked questions
- What is the break-even formula?
- The break-even point in units equals fixed costs divided by the contribution margin per unit, where contribution margin is the selling price per unit minus the variable cost per unit. In symbols: break-even units = fixed costs / (price − variable cost). Multiply the result by your price to get the break-even point in revenue.
- How many units do I need to sell to break even?
- Divide your total fixed costs by the contribution margin (price minus variable cost per unit). For example, with $5,000 of fixed costs, a $50 price and $20 of variable cost, you need 5,000 / (50 − 20) = 167 units to break even. Always round up, because a partial unit still leaves you short of covering costs.
- How do I run a break-even analysis for billable hours?
- Treat one billable hour as one unit. Your price is your hourly rate, and your variable cost per hour is any per-hour cost such as software, subcontractor time or processing fees. Divide your fixed monthly costs by (hourly rate minus variable cost per hour) to find how many hours you must bill each month to break even.
- What is the difference between fixed costs and variable costs?
- Fixed costs stay the same no matter how much you sell, such as rent, software subscriptions, insurance and salaries. Variable costs change with each unit sold, such as materials, shipping, payment-processing fees or per-project subcontracting. The break-even calculation separates the two because only variable costs scale with volume.
- What is contribution margin?
- Contribution margin is the money left from each sale after subtracting the variable cost of that sale: price minus variable cost per unit. It is the amount each unit contributes toward covering fixed costs and, once break-even is passed, toward profit. A higher contribution margin means you break even at a lower volume.
- Why does my break-even point change when I lower my price?
- Lowering the price shrinks the contribution margin on every unit, so each sale covers less of your fixed costs and you must sell more units to break even. Raising the price has the opposite effect. This is why the break-even calculator recalculates the moment you change price, variable cost or fixed costs.