EZForecasting

Break-even calculator

Find out how many sales it takes to cover your costs, and how many more it takes to hit a profit goal.

Reviewed October 2026

Break-even calculator

How the break-even point works

Your break-even point is the level of sales where total revenue equals total costs. Below it you lose money; above it every sale adds profit. The U.S. Small Business Administration gives the formula as:

Break-even units = fixed costs ÷ (price per unit − variable cost per unit)

  • Fixed costs stay the same however much you sell in a period: rent, salaries, insurance, software subscriptions, loan payments.
  • Variable costs rise with each sale: materials, packaging, shipping, payment processing fees, sales commissions.
  • Price minus variable cost is the contribution margin: what each sale contributes toward fixed costs. Divided by price, it's the contribution margin ratio.

To get the break-even point in sales dollars, divide fixed costs by the contribution margin ratio. The calculator shows both.

An example

A bakery pays $6,000 a month in rent, wages and insurance. It sells cakes for $40, and each one costs $15 in ingredients and boxes.

  • Contribution margin: $40 − $15 = $25 per cake (62.5%)
  • Break-even: $6,000 ÷ $25 = 240 cakes a month, or $9,600 in sales
  • To make $3,000 profit: ($6,000 + $3,000) ÷ $25 = 360 cakes

Tips for a more useful answer

  • Use the same period for everything. If fixed costs are monthly, the answer is units per month.
  • Split mixed costs. A phone bill with a base fee and per-minute charges has a fixed and a variable part. Put each in the right place.
  • Use an average price if you sell several products, weighted by how much of each you sell, and the matching average variable cost.
  • Add a buffer. The SBA suggests adding about 10% to cover costs you can't predict.
  • Compare it with your forecast. If the sales forecast for next quarter falls short of break-even, you know early enough to cut costs or raise prices.

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