Break-Even Calculator
Work out your break-even point — the number of units you must sell to cover your fixed costs. Enter your fixed costs, selling price per unit and variable cost per unit to see the break-even units and revenue.
Break-even is the number of units you must sell to cover your fixed costs. Each unit contributes its selling price minus the variable cost of making it.
The break-even formula
Break-even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
- First find the contribution per unit — the selling price minus the variable cost of making one unit. This is what each sale contributes towards covering fixed costs.
- Divide the fixed costs by the contribution per unit to find how many units you must sell to break even.
- Break-even revenue is the break-even units multiplied by the selling price.
How to use this calculator
- Enter your fixed costs — the costs that do not change with how much you sell.
- Enter your selling price per unit and the variable cost of making each unit.
- The break-even units, break-even revenue and contribution per unit update instantly.
Worked examples
A basic break-even point
£2,000 fixed costs, selling price £20, variable cost £10. Contribution per unit = £20 − £10 = £10. Break-even units = £2,000 ÷ £10 = 200. Break-even revenue = 200 × £20 = £4,000.
A higher fixed-cost business
£5,000 fixed costs, selling price £25, variable cost £15. Contribution = £10. Break-even units = £5,000 ÷ £10 = 500. Break-even revenue = 500 × £25 = £12,500.
A low-cost service
£1,500 fixed costs, selling price £10, variable cost £4. Contribution = £6. Break-even units = £1,500 ÷ £6 = 250. Break-even revenue = 250 × £10 = £2,500.
A higher selling price lowers the break-even point
£10,000 fixed costs, selling price £50, variable cost £30. Contribution = £20. Break-even units = £10,000 ÷ £20 = 500. Raising the price (or cutting the variable cost) increases the contribution and reduces the units needed.
When the variable cost exceeds the selling price
Selling price £20, variable cost £25. Contribution = £20 − £25 = −£5. Each unit loses money, so there is no break-even point — review your pricing or costs before selling at that price.
Fixed costs, variable costs and contribution
Break-even depends on three kinds of cost and revenue figure. Here is what each means, in plain English.
- Fixed costs
- Costs that stay the same regardless of how much you sell — rent, salaries, insurance. They must be covered before any profit is made.
- Variable costs
- Costs that change with output — materials and direct labour per unit. They rise as you sell more.
- Contribution per unit
- The selling price minus the variable cost of one unit. It is the amount each sale contributes towards fixed costs, and then to profit once fixed costs are covered.