Break-Even Calculator
Find how many units you need to sell, and how much in sales, to cover your fixed costs. Add a profit target or your current sales to see your margin of safety. Free, no signup, nothing leaves your browser.
Full guide: The profit margin formula, with worked examples →
Know your numbers every month without a spreadsheet?
When sales, costs and stock live in one system, break-even and margins update themselves instead of being rebuilt in Excel each month.
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The break-even formula
Break-even units = fixed costs ÷ (selling price − variable cost per unit). The bracket is the contribution margin: what each sale contributes towards fixed costs. Break-even sales = break-even units × price.
Worked example: fixed costs of S$12,000 a month, a selling price of S$50 and a variable cost of S$30. Each unit contributes S$20, so break-even is 12,000 ÷ 20 = 600 units, or S$30,000 of sales a month. To make S$5,000 profit you need (12,000 + 5,000) ÷ 20 = 850 units.
Fixed or variable?
- Fixed costs stay the same whatever you sell: rent, salaries, software, insurance, loan repayments.
- Variable costs rise with every unit: the cost of the goods, packaging, delivery, card and marketplace fees, sales commission.
Three ways to lower break-even
- Raise the price. A small increase goes straight into the contribution margin; the calculator shows the effect of a 5% rise.
- Cut the variable cost per unit: better supplier terms, cheaper packaging, lower payment fees.
- Trim fixed costs, or make them work harder before adding more.
Margins differ by product, so a single average can hide the ones losing money. Check each product with the free profit margin calculator.
Questions
How do you calculate the break-even point? Divide fixed costs by the contribution margin per unit (selling price minus variable cost per unit). The answer is the number of units you must sell to cover fixed costs.
What is the margin of safety? How far current sales are above break-even, as a percentage of current sales. A 25% margin of safety means sales could fall by a quarter before you make a loss.
What if my price is below my variable cost? Then every sale loses money and there is no break-even point. Raise the price or cut the variable cost first.
More free calculators: break-even, gross profit, price increase, DSO, GST, invoice due date and all free tools.
