About this tool
Each sale contributes its price minus its variable cost towards fixed costs. Once those contributions cover rent, salaries and other fixed costs, every further sale is profit.
Finding the point where your business pays for itself
Every business has costs that stay the same whatever you sell, such as rent, salaries and software subscriptions, and costs that rise with each sale, such as materials and packaging. The break-even point is the level of sales at which the money left over from each sale has covered all those fixed costs. Below it you lose money; above it every sale adds profit.
The calculation is simple once you know three numbers. Subtract the variable cost from the selling price to find what each unit contributes, then divide your monthly fixed costs by that contribution. If fixed costs are ₹60,000, you sell at ₹500 and each unit costs ₹300 to make, every sale contributes ₹200 and you need 300 sales a month to break even. The calculator also shows the revenue that represents.
Use it to test decisions before you make them. Raising the price by a small amount can cut the break-even volume sharply, because the whole increase goes to contribution. Moving to a larger shop raises fixed costs and pushes the target higher, so you can check whether the extra footfall is likely to cover it. If the price is below the variable cost, no volume will ever break even, and the business needs a rethink. Be realistic about variable costs and include payment fees, delivery and returns. Recalculating whenever costs change keeps you aware of how many sales you truly need. Tracking actual sales against the break-even figure each month gives an early warning long before cash runs short.
How to use it
- Enter your numbers in the boxes, or drag the sliders.
- Read the result on the right. It updates as you type.
- Open the year-by-year table, if shown, to see how the numbers change over time.
- Use 'Copy link with these values' to save the calculation or send it to someone.
Questions
What is the break-even formula?
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit).
What if price is below variable cost?
Then every sale loses money and there is no break-even point. Raise the price or cut the cost per unit.
Last reviewed 16 October 2026. Results are estimates for planning. Check important figures with your bank, employer or a qualified adviser.