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Break-Even Calculator

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Rent, salaries, software, overheads

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Price you charge per product or order

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COGS, shipping, packaging, ad spend per sale

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Leave blank to calculate pure break-even

Break-Even Units
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Break-Even Revenue
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Units to Hit Target
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Contribution Margin
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Margin Ratio
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Daily Units Needed
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Variable Cost Contribution Margin

Results are estimates. Actual figures depend on your specific cost structure and market conditions.

What Is a Break-Even Calculator?

A break-even calculator is a financial tool that tells you exactly how many units you need to sell — or how much revenue you need to generate — before your business starts making a profit. At the break-even point, your total revenue equals your total costs: you are neither making money nor losing it.

Whether you are running a dropshipping store, managing a restaurant, trading forex, or building a new product, understanding your break-even point is one of the most important steps before you spend a single dollar on inventory or advertising.

Our free break-even calculator online gives you instant results. Simply enter your fixed costs, selling price, and variable cost per unit — and the calculator does the rest in seconds.

Break-Even Point Formula in Sales

The standard break-even point formula in sales is straightforward:

Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost Per Unit)

The part of the formula inside the brackets — Selling Price minus Variable Cost — is called the Contribution Margin. It represents how much each unit sold contributes toward covering your fixed costs.

Contribution Margin = Selling Price − Variable Cost Per Unit
Break-Even Revenue = Break-Even Units × Selling Price

Worked Example

Say you run an online store with:

  • Fixed costs: $3,000/month (rent, tools, salaries)
  • Selling price: $50 per order
  • Variable cost: $20 per order (product cost + shipping)

Contribution Margin = $50 − $20 = $30

Break-Even Units = $3,000 ÷ $30 = 100 units/month

Break-Even Revenue = 100 × $50 = $5,000/month

This means you need to sell at least 100 orders every month before your business becomes profitable.

Break-Even Calculator by Industry

Break-even analysis looks slightly different depending on your business model. Here is how to apply it across the most common use cases:

Industry Fixed Costs Include Variable Costs Include
Dropshipping Shopify, apps, ads budget Product cost, shipping, payment fees
Restaurant Rent, staff wages, utilities Food cost, packaging, delivery fees
Forex / Trading Platform fees, subscriptions Spread, commission per trade
SaaS / Software Dev salaries, hosting, tools Payment processing, support cost
Freelancer / Agency Office, software, salaries Contractor fees, ad costs
Manufacturing Factory rent, equipment, admin Raw materials, labour per unit

Break-Even Calculator for Dropshipping

For dropshipping businesses, your variable cost per unit typically includes the product cost from your supplier, shipping fees, payment gateway fees (usually 2–3%), and your cost per acquisition from advertising. Many dropshippers make the mistake of ignoring ad spend in their variable cost, which leads to a dangerously optimistic break-even calculation.

Break-Even Calculator for Restaurants

Restaurant break-even analysis is typically done on a monthly basis. Your fixed costs include rent, salaried staff, insurance, and equipment leases. Variable costs include food cost per cover, packaging, and part-time staff hours. Most profitable restaurants aim for a food cost ratio of 28–35% of revenue, which directly affects how many covers you need to break even each month.

Break-Even Calculator for Forex and Trading

In forex and trading, the break-even calculation focuses on the number of winning trades needed to cover your losing trades and platform costs. A common break-even calculator for forex metric is your break-even win rate: if your average win is $200 and your average loss is $100 with a 1:2 risk-reward ratio, you need a win rate above 33% to break even. This calculator can help you model those scenarios using fixed costs as your account overhead and variable costs as your per-trade fees.

How to Do Break-Even Calculation in Excel

If you prefer working in spreadsheets, here is how to replicate a break-even calculation in Excel or Google Sheets manually:

  1. In cell B1, enter your Fixed Costs (e.g. 5000)
  2. In cell B2, enter your Selling Price per unit (e.g. 49.99)
  3. In cell B3, enter your Variable Cost per unit (e.g. 18)
  4. In cell B4, enter the formula: =B1/(B2-B3) → this gives Break-Even Units
  5. In cell B5, enter: =B4*B2 → this gives Break-Even Revenue

Our online break-even calculator does all of this automatically and also calculates your contribution margin ratio, daily units needed, and target profit units — saving you time compared to building it manually in Excel.

Understanding Contribution Margin

The contribution margin is a key number in every break-even calculation. It tells you how much profit each sale contributes after covering its own variable costs — before fixed costs are accounted for.

A high contribution margin means each sale moves you toward profitability faster. A low contribution margin means you need significantly more volume to cover your fixed costs.

Contribution Margin Ratio (%) = (Contribution Margin ÷ Selling Price) × 100

For example, if your selling price is $100 and your variable cost is $40, your contribution margin is $60 and your contribution margin ratio is 60%. This means 60 cents of every dollar in revenue goes toward covering fixed costs and generating profit.

Margin of Safety

Once you know your break-even point, you can calculate your margin of safety — how far your actual sales can drop before you start losing money.

Margin of Safety = Current Sales − Break-Even Sales

A margin of safety above 20% is generally considered healthy. If your margin of safety is very low, small drops in sales — from seasonality, competition, or market changes — can quickly push you into a loss.

Tips to Lower Your Break-Even Point

There are only three ways to reduce your break-even point — and improving all three together can dramatically accelerate your path to profitability:

  • Reduce fixed costs — Renegotiate rent, cut unused software subscriptions, or automate manual processes to reduce headcount.
  • Increase selling price — Even a small price increase has a large effect on your contribution margin and break-even units. Test higher pricing before assuming you can’t charge more.
  • Reduce variable costs — Negotiate better supplier rates, reduce packaging costs, improve ad efficiency to lower cost per acquisition, or reduce shipping rates through volume deals.

Frequently Asked Questions

The break-even point is the level of sales at which your total revenue exactly equals your total costs — meaning your profit is zero. It matters because it sets the minimum performance target for your business. Any sales above the break-even point generate profit; any below it result in a loss. Every business owner, investor, and manager should know their break-even point before making pricing, hiring, or investment decisions.
Fixed costs are expenses that stay the same regardless of how many units you sell — such as rent, salaried staff, insurance, and software subscriptions. Variable costs change in direct proportion to your sales volume — such as the cost of goods sold, shipping fees, packaging, and per-transaction payment fees. The distinction is critical for an accurate break-even calculation. If you misclassify a variable cost as fixed (or vice versa), your break-even number will be wrong.
For dropshipping, enter your monthly fixed costs (Shopify subscription, apps, any salaries) as Fixed Costs. For Selling Price, use your average order value. For Variable Cost Per Unit, add together your product cost from the supplier, shipping fee, payment processing fee (typically 2–3%), and your average cost per acquisition from ads. The result tells you how many orders you need each month to break even on your ad spend and overheads.
In forex and trading, a break-even calculator helps you determine the minimum win rate or profit per trade needed to cover your costs and losses. You can model this by entering your monthly platform and data feed costs as Fixed Costs, your average profit per winning trade as Selling Price, and your average loss per losing trade as Variable Cost. The break-even units result tells you the minimum number of winning trades needed each month. Traders also use break-even analysis to set stop-loss levels that protect their position from a loss after a partial favorable move.
There is no universal “good” break-even point — it depends entirely on your industry, capacity, and market. However, a healthy business typically has a break-even point well within its realistic monthly sales capacity, leaving a comfortable margin of safety. As a general rule, aim for your break-even point to be no more than 60–70% of your expected monthly sales. This gives you a 30–40% margin of safety before losses occur.
Yes. For a restaurant, enter your total monthly fixed costs (rent, salaried staff, utilities, insurance) as Fixed Costs. Use your average revenue per cover or per table as Selling Price. Enter your average food, beverage, and variable labour cost per cover as Variable Cost Per Unit. The result tells you how many covers you need to serve each month before your restaurant becomes profitable. Most restaurants target a food cost ratio of 28–35%, which means a contribution margin of 65–72%.
Yes — this break-even calculator is completely free to use with no sign-up, no account, and no limits. You can run as many calculations as you need. All calculations are performed instantly in your browser and no data is stored or sent to any server.
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