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Break-Even Calculator

Calculators · Added 15 August 2026

Break-even is the sales volume at which a business stops losing money and starts making it. Enter your fixed costs, your selling price and what each unit costs to produce, and this calculator returns the volume and revenue needed — and, if you set one, the sales required to reach a target profit.

Rent, salaries, insurance — costs that do not change with volume.

Materials, packaging, per-sale fees.

Volume needed to earn this on top.

How to use the break-even calculator

  1. 1Enter your fixed costs for the period: rent, salaries, insurance — anything that does not change with how much you sell.
  2. 2Enter the selling price of one unit.
  3. 3Enter the variable cost of one unit: materials, packaging, per-sale fees.
  4. 4Optionally add a target profit to see the volume that earns it.
  5. 5Press Calculate. The contribution margin is the number to watch — it is what each sale puts towards the fixed costs.

Examples

A straightforward case

Input
₹50,000 fixed costs, ₹100 selling price, ₹60 variable cost
Result
Break-even at 1,250 units, or ₹1,25,000 of revenue

Each sale contributes ₹40. It takes 1,250 of those to cover ₹50,000.

Adding a profit target

Input
The same figures with a ₹20,000 target profit
Result
1,750 units — 500 more than break-even

The target simply adds to the fixed costs in the numerator.

When there is no break-even

Input
₹1,000 fixed costs, ₹50 price, ₹60 variable cost
Result
Rejected — every sale increases the loss

With a negative contribution margin, volume makes things worse. The calculator says so rather than printing a nonsense number.

About the break-even calculator

The one division that runs the whole thing

Break-even analysis reduces to a single division: fixed costs ÷ contribution margin. Everything else is preparation for that step, and understanding it makes the levers obvious.

There are exactly three ways to lower the break-even point. Reduce fixed costs, which shrinks the numerator. Raise the price, which widens the contribution margin. Or cut the variable cost per unit, which widens it from the other side. Nothing else moves the number, which is a useful discipline when a business is trying to work out what to change.

The relative power of those three is not obvious until you try them. On the example above — ₹50,000 fixed, ₹100 price, ₹60 variable — a 10% price rise drops break-even from 1,250 units to 1,000. A 10% cut in fixed costs only drops it to 1,125. Price is usually the strongest lever and the one businesses are most reluctant to pull.

Where the model stops being true

The arithmetic assumes fixed costs stay fixed and variable costs stay proportional, and neither holds indefinitely. Fixed costs are fixed within a range of output — pass a certain volume and you need another machine, another shift, a bigger unit, and the 'fixed' figure steps up. Break-even should therefore be read as valid for a stated range, not as a permanent property.

Variable costs are rarely perfectly linear either. Bulk purchasing lowers unit material costs as volume rises, while overtime raises unit labour costs. The two often pull in opposite directions, which is why real cost curves bend rather than running straight.

The single-product assumption is the largest simplification for most businesses. With a range, break-even depends on the sales mix as well as the volume, because different products carry different contribution margins — sell more of the low-margin lines and the break-even volume rises even though nothing about your costs changed. The usual workaround is to compute a weighted average contribution margin across the expected mix, and to revisit it whenever that mix shifts.

Frequently asked questions

What is a contribution margin?
The selling price minus the variable cost of one unit — what each sale contributes towards covering fixed costs, and towards profit once those are covered. It is the single most important number in this calculation, because break-even volume is just fixed costs divided by it.
Which costs are fixed and which are variable?
Fixed costs do not change with volume in the short term: rent, salaried wages, insurance, software subscriptions. Variable costs are incurred per unit sold: materials, packaging, shipping, payment processing, sales commission. In practice the line is blurry — utilities move somewhat with production, and a 'fixed' cost usually steps up at some volume rather than staying flat forever.
Why round the units up?
Because you cannot sell 1,249.7 units. At 1,249 you are still marginally short of covering fixed costs; the first full unit past the exact figure is where you cross. The precise decimal is shown too, since it is the figure you would use in further calculations.
What does break-even not tell me?
Whether the volume is achievable, which is the question that actually matters. A break-even of 1,250 units a month is trivial for some businesses and impossible for others, and the calculation is silent about your market. It also assumes a single product at a single price, which is a simplification for most real businesses with a range.
Can I use this for a service business?
Yes — treat a billable hour or a project as the unit. Fixed costs are your overheads, the price is your rate, and the variable cost is whatever each engagement costs you directly. Where variable costs are near zero, which is common in services, the contribution margin approaches the full rate and break-even is simply overheads divided by rate.

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