Break-Even Calculator
How do I calculate my break-even point?
Divide your fixed monthly costs by your gross margin. The sample business needs $50,000 of sales a month at a 45.0% margin — $1,644 a day, or 417 units at its price. Its sales could fall 3.8% before reaching that point.
Break-even is the sales level where the business neither makes nor loses money. It is the first number to know before a price change, a new hire or a slow season — and the gap between it and today's sales is your margin of safety.
TightYou are above break-even: sales can fall 3.8% before the business stops making money.
| Break-even sales per month | $50,000 | fixed costs ÷ 45.0% margin from your price and unit cost |
|---|---|---|
| Break-even sales per day | $1,644 | monthly break-even × 12 ÷ 365 |
| Break-even units per month | 417 | fixed costs ÷ $54.00 contribution per unit, rounded up |
| Monthly profit at current sales | $900 | current sales × margin − fixed costs |
| Margin of safety | 3.8% | how far sales can fall before break-even |
| Gross margin | Break-even sales |
|---|---|
| 20% | $112,500 |
| 30% | $75,000 |
| 40% | $56,250 |
| 50% | $45,000 |
| 60% | $37,500 |
| 70% | $32,143 |
Runs in your browser with fixed, tested formulas — the same exact arithmetic as the Business X-Ray. Nothing you type is sent or stored.
One question answered. Eight more are waiting.
This page tests one thing with a few monthly numbers. The Business Decision X-Ray runs your whole business through the same engine, day by day: nine tests, the exact breakpoint, the smallest repair and a dated action plan. Open demo of every section, no sign-up.
How this calculator works
Every sale leaves its gross margin to pay the fixed costs. Break-even sales = fixed costs ÷ gross margin, rounded up to the cent. If you enter a price and a unit cost, the contribution per unit is price − unit cost, break-even units = fixed costs ÷ contribution (rounded up to a whole unit), and the margin used everywhere is the one they imply — the margin field is then ignored, so units and sales always describe the same break-even.
With current sales, the calculator also gives monthly profit and the margin of safety: the share of sales you could lose before reaching break-even, rounded down.
The formula
Break-even sales = fixed costs ÷ gross margin.
Break-even units = fixed costs ÷ (price − unit cost), rounded up.
Margin of safety = (current sales − break-even sales) ÷ current sales.
Worked example
The sample business has $50,000 of break-even sales at a 45.0% margin — 417 units at a price of 120 and a unit cost of 66. Its sales could fall only 3.8% before reaching that point. That thin margin of safety is why the sales-drop and runway tests matter: a small, ordinary dip removes all the profit.
Profit break-even is not cash break-even
A business can be above break-even and still run out of cash — when customers pay in 60 days, when a tax bill lands, or when stock must be bought ahead. Break-even is a profit measure. The cash question is answered by the runway and payment-terms calculators, and in full by the Business X-Ray.
What this calculator does not do
- One margin for all sales; a product mix with different margins needs a weighted average margin.
- Profit, not cash: it does not include payment timing, stock or tax dates.
- Fixed costs are treated as fixed at every sales level.
Questions people ask
What counts as a fixed cost?
Anything you pay regardless of how much you sell this month: salaries, rent, insurance, software, loan payments and the pay you take out. Costs that rise with each sale — materials, shipping, card fees, commissions — belong in the gross margin instead.
What is the difference between gross margin and markup?
Margin is profit as a share of the price; markup is profit as a share of the cost. A 50% markup is a 33.3% margin. This calculator uses margin.
Should I use monthly or yearly figures?
Either, as long as fixed costs and sales cover the same period. The page is set up for monthly figures because that is how most owners see their bills.
How do I lower my break-even point?
Raise the margin (price or direct costs) or lower fixed costs. The table shows how far each margin point moves it.
Related decisions
- Minimum Price Calculator — The lowest price that covers every cost — and your margin on top.
- Sales Drop Calculator — How far sales can fall before you lose money — and before cash runs out.
- Cash Runway Calculator — How many months your cash lasts — now, with no sales, and if sales fall.
- Cost Increase Calculator — What a cost rise does to profit and runway, and the price rise that covers it.
- How to stress test your small business cash flow
- How to Price Coffee Drinks and Keep Your Cafe Profitable
Formulas reviewed 26 September 2026
