Break-Even Calculator
Find out how many units you need to sell to cover all costs and start making profit — for any business or product.
Rent, salaries, insurance — costs that don't change
Materials, packaging per unit sold
BEP = Fixed Costs ÷ (Price − Variable Cost)
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Contribution Margin = Price − Variable Cost
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Margin of Safety = (Actual − BEP) ÷ Actual × 100
How Break-Even Analysis Works
Break-even analysis answers the fundamental business question: how many units do I need to sell before I stop losing money? Every business has two types of costs — fixed costs that don't change with volume (rent, salaries, insurance) and variable costs that increase with each unit sold (materials, packaging, commissions). The break-even point is where your total revenue exactly covers both.
Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
Contribution Margin = Selling Price − Variable Cost per Unit
Break-Even Revenue = Break-Even Units × Selling Price
Margin of Safety = (Expected Units − Break-Even Units) ÷ Expected Units × 100%
Contribution Margin = Selling Price − Variable Cost per Unit
Break-Even Revenue = Break-Even Units × Selling Price
Margin of Safety = (Expected Units − Break-Even Units) ÷ Expected Units × 100%
The contribution margin is the key driver — it represents how much each sale contributes toward covering fixed costs and generating profit. A higher contribution margin means you reach break-even faster. Once fixed costs are fully covered by cumulative contribution margins, every additional unit sold is pure profit.
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Frequently Asked Questions — Break-Even Calculator
The break-even point is the number of units (or amount of revenue) at which total revenue equals total costs — no profit, no loss. Every unit sold above this point generates profit. Formula: Break-even units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit).
Contribution margin = Selling price − Variable cost per unit. It shows how much each unit sold contributes toward covering fixed costs and then generating profit. Once total contribution margin equals total fixed costs, you have reached break-even. Contribution margin ratio = Contribution margin ÷ Selling price × 100%.
Three ways: (1) Increase selling price — even a 10% price increase can significantly reduce break-even units. (2) Reduce variable costs — negotiate with suppliers, improve processes, reduce waste. (3) Cut fixed costs — renegotiate rent, reduce headcount, cut subscriptions. Reducing fixed costs has the most direct impact since break-even units = fixed costs ÷ contribution margin.
Contribution margin ratios vary by industry: SaaS/software: 60–85%, Retail: 20–50%, Manufacturing: 25–45%, Services/consulting: 50–75%, Food & beverage: 15–35%. A higher ratio means each rupee of revenue covers more fixed costs, reaching break-even faster.
Fixed costs remain constant regardless of volume: rent, salaries, insurance, loan repayments, equipment depreciation. Variable costs change proportionally with units sold: raw materials, packaging, shipping per order, sales commissions, payment processing fees. Misclassifying costs is the most common error in break-even analysis.
Yes — for service businesses, replace "units" with "clients" or "hours billed". Fixed costs = office rent + staff salaries. Variable cost per unit = direct cost per client/hour. Selling price = fee per client/hour. A freelancer with ₹30,000 monthly fixed costs charging ₹3,000/hour with ₹500 variable costs needs to bill 12 hours per month to break even.
The margin of safety is the difference between expected (or actual) sales and the break-even point. It shows how much sales can fall before you start losing money. Margin of safety = (Expected units − Break-even units) ÷ Expected units × 100%. A margin of safety above 20–25% is generally considered healthy for most businesses.
⚠️ Disclaimer: This calculator is for educational and informational purposes only. Results are estimates based on the inputs provided and standard financial formulas. Actual returns, tax liability, or costs may vary based on market conditions, applicable laws, and individual circumstances. This does not constitute financial, investment, or tax advice. Please consult a qualified financial advisor or Chartered Accountant before making financial decisions.