The Break-Even Point Calculator tells you how many units you must sell to cover all your costs — the moment a product or business stops losing money and starts making it. Enter your fixed costs, selling price and variable cost per unit and it does the analysis instantly in your browser.
What counts as a fixed cost vs a variable cost
Getting the inputs right is as important as the formula itself.
Fixed costs are costs you incur regardless of how many units you sell. They exist even if revenue is zero. Common examples: rent and rates, salaries of employees whose headcount doesn’t change with output, annual software subscriptions, insurance premiums, and loan repayments. The key test: if you sold nothing this month, would this cost still appear on the bill?
Variable costs change in direct proportion to output. Each additional unit sold triggers these costs. Examples: raw materials per unit, packaging, per-unit payment processing fees, freelancer costs billed per deliverable, shipping per order. If you sell nothing, these costs are zero.
Some costs fall in between — “semi-variable” — for example, a production manager’s salary that is fixed up to a certain output level but requires extra shifts if volume doubles. For a first analysis, assign semi-variable costs to whichever bucket they most resemble, or split them proportionally.
The break-even formula
break-even units = fixed costs ÷ (price − variable cost per unit)
The bracket is the contribution margin: the slice of each sale that’s left after the variable cost, available to cover fixed costs. Once enough units sell to cover all fixed costs, every further sale is profit.
Worked examples
Example 1 — Online subscription product:
A software product with £8,000/month in fixed costs (hosting, salaries, tooling), priced at £20/month per subscriber, with £2 variable cost per subscriber (payment processing, support allocation):
- Contribution margin = £20 − £2 = £18
- Break-even subscribers = £8,000 ÷ £18 ≈ 445 subscribers
- Break-even revenue = 445 × £20 = £8,900/month
Example 2 — Physical product:
A handmade product with £10,000 fixed costs for the period (workshop rent, equipment depreciation), priced at £50, with £20 variable cost per unit (materials, packaging, per-unit postage):
- Contribution margin = £50 − £20 = £30
- Break-even units = £10,000 ÷ £30 ≈ 334 units
- Break-even revenue = 334 × £50 ≈ £16,700
How to use the result practically
The break-even point is most useful as a stress-test, not just a target:
Run a sales-feasibility check. Can your market realistically absorb 334 units per month? If not, you are not pricing or costing the product correctly for the market size you have access to.
Model the effect of price changes. A 20% price increase from £50 to £60 raises the contribution margin to £40 and drops the break-even to 250 units. Even a small price increase can dramatically reduce the sales volume you need to survive.
Identify dangerous cost structures. A high fixed cost base (for example, taking on a large office lease) pushes break-even far out, which increases risk in a slow-start business. Break-even analysis makes that risk concrete and visible before you sign the lease.
Sanity-check investor assumptions. If a business plan claims profitability at 100 units/month but the break-even calculation shows 500, the plan is structurally flawed and needs revision before fundraising.
If price ever drops below variable cost, the contribution margin goes negative and break-even becomes impossible — a clear signal to reprice or cut variable costs before any volume of sales becomes profitable. Everything is calculated locally in your browser.