Free break-even calculator
The calculator shows how many sales per month you need to cover your business's fixed costs. Enter your fixed costs, average sale price and direct cost per sale, and the result appears right away without an account.
How to calculate your break-even point
- Fill in your fixed costs per month, such as rent, salaries and internet, because they don't change with sales volume.
- Enter your average price per sale and your direct cost per sale, such as the product and packaging cost.
- Optionally, enter your current sales per month to see how far you are from the point.
- Click Calculate break-even point and see how many sales per month, and how much revenue, cover your costs.
Break-even point = fixed costs per month ÷ (average price per sale − direct cost per sale). For example, with fixed costs of $3,000 per month, an average price of $50 and a direct cost of $25 per sale, the math is 3,000 ÷ (50 − 25) = 3,000 ÷ 25 = 120 sales per month, or $6,000 in monthly revenue.
How the calculator works
The calculator works with monthly figures. You enter the fixed costs for each month, your average price and your direct cost per sale, and it returns the number of sales per month that covers your costs.
If you also enter your current sales per month, the result shows how many sales you still need to reach the point, or by how much you're already past it.
When the price is equal to or lower than the direct cost, no number of sales solves the math. In that case the calculator warns you that the problem is margin, not sales volume.
The break-even formula
The math uses the contribution margin, which is what's left of the price after paying the direct cost of each sale.
- Fixed costs: rent, salaries, internet and software, the expenses that repeat every month even with no sales.
- Contribution margin: average price per sale minus the direct cost per sale.
- Break-even point: fixed costs divided by the contribution margin.
Every sale past the break-even point generates profit, because the month's fixed costs are already covered.
When to use the calculator
Use the calculator before changing a product's price, to see how many sales the new margin requires.
Use it when planning the month, to turn fixed costs into a clear sales goal for the team.
Use it when evaluating a new business or product, to know the minimum sales volume it needs.
Use it when reviewing expenses, to see how many fewer sales you need once a fixed cost drops.
Frequently asked questions about break-even
It's the sales volume at which revenue pays all of the business's costs, with nothing left over and nothing missing. Below it, the month ends in a loss. Above it, every sale generates profit. The calculator shows that number in sales per month and in revenue.
Divide the monthly fixed costs by the contribution margin, which is the average sale price minus the direct cost. For example, fixed costs of $3,000, average price of $50 and direct cost of $25 give 3,000 ÷ 25 = 120 sales per month. The calculator does that math and also shows the matching revenue.
The ones that repeat every month and don't change with sales volume: rent, salaries, utilities, internet and software subscriptions. Raw materials, packaging and per-sale commissions don't belong here. They're direct costs, and you enter them in the cost per sale field.
It's the cost that only exists when you sell, like the product's cost, packaging, delivery or the sales commission. If you sell different products, use an average per sale. The calculator subtracts this cost from the price to find the contribution margin.
Because the fixed costs you enter are monthly, and a month is the natural comparison period for a small business. You can look at the month's sales and know right away whether the costs are covered or how far you are from the point.
It means the price is equal to or lower than the direct cost, so each sale leaves nothing to help pay the fixed costs. In that scenario, selling more only increases the loss. The way out is to raise the price or cut the direct cost, and then recalculate the point.
Fill in the current sales per month field too, and the result shows how many sales are missing until the point, or by how much you're past it. To track the point every month with your sales logged, use Kyte, which shows how much you've sold this month against your break-even point.
Track this month's sales against your break-even point in Kyte
Log your sales in Kyte and see in real time how much is left to cover the month's fixed costs.