2026 Break-Even Calculator
Find the sales volume where your business starts making money. Enter your fixed costs, price, and per-unit cost — see your break-even point and margin of safety instantly.
This calculator provides estimates for educational use only. It is not tax, legal, or financial advice. Figures are based on current IRS rules — verify against IRS.gov or consult a licensed professional. See our full disclaimer.
Your Numbers
Break-Even Results
* Pure accounting math — no tax rates or time-sensitive figures are used. Formula verified against the U.S. Small Business Administration break-even guidance (Fixed Costs ÷ (Price − Variable Costs) = Break-Even Units) and Investopedia's Break-Even Analysis. Estimates only; real costs fluctuate. Not financial advice.
About the Break-Even Calculator
Fixed vs. Variable Costs
Fixed costs (rent, software, base salaries) stay flat as volume changes. Variable costs (materials, fulfillment) rise with every unit. Break-even splits the two clearly.
Contribution Margin
Each sale contributes Price − Variable Cost toward your fixed costs. Once fixed costs are covered, that same margin becomes pure profit.
Margin of Safety
Enter your expected monthly sales to see how many units of cushion you have before dropping below break-even — a key risk signal for any small business.
Plan With Cash Flow
Break-even shows the volume; our Cash Flow Calculator shows the timing. Use both to avoid shortfall months.
How to Calculate Your Break-Even Point
- Total your fixed costs. Add up monthly overhead that does not change with sales — rent, software subscriptions, insurance, and any salaried labor.
- Find your contribution margin. Subtract the variable cost per unit from your selling price. This is how much each sale helps cover fixed costs.
- Divide. Fixed Costs ÷ Contribution Margin = Break-Even Units. Multiply by price (or divide by the contribution margin ratio) for break-even revenue.
- Add a profit target. To earn a target profit, divide (Fixed Costs + Target Profit) by the contribution margin — that is the units you must sell.
- Check your cushion. Compare expected sales to break-even. The gap is your margin of safety — how far sales can fall before you lose money.
Break-Even Calculator FAQs
The break-even point is the sales volume where total revenue equals total costs — you neither profit nor lose money. Below it you operate at a loss; above it every additional sale adds profit.
Use the SBA formula: Fixed Costs ÷ (Price per Unit − Variable Cost per Unit) = Break-Even Units. The denominator is your contribution margin — the money each sale contributes toward covering fixed costs.
Contribution margin is the selling price minus the variable cost per unit. It is the portion of each sale available to pay fixed costs and then generate profit. Contribution margin ratio expresses it as a percentage of price.
It tells you the minimum sales you must hit to survive, helps you set prices, and shows your margin of safety — how far sales can drop before you lose money. It pairs well with our Cash Flow Calculator for planning.
Authoritative References
- U.S. Small Business Administration — Break-Even Point — the formula used here: Fixed Costs ÷ (Price − Variable Costs) = Break-Even Units.
- Investopedia — Break-Even Analysis — defines contribution margin, break-even in units and dollars, and margin of safety.
Estimates only. Assumes fixed and variable costs stay constant and ignores financing, taxes, and demand limits. Educational information, not financial advice — confirm with a qualified accountant.