Break-Even Calculator

Sonary’s Break Even Calculator helps small and mid-sized businesses figure out exactly how much they need to sell to cover their costs. Whether you run an e-commerce store, brick-and-mortar shop, or service-based company, this tool shows you the minimum sales needed to break even and how to find the break-even point, no spreadsheets required.

Just input your fixed costs, variable costs, and selling price. The calculator handles the rest, giving you a visual snapshot of where you stand, how profitable you are, and how much room you have to grow.

No math. No guesswork. Just clear, actionable answers based on your actual numbers.

How to use the Break-Even Calculator

The break-even point calculator is built to be intuitive, so you can get answers fast without needing a finance degree. Here’s how to use it:

Step 1: Enter your fixed costs

Type in how much you spend on rent, salaries, insurance, and other overhead. These costs don’t change based on how many units you sell.

• Example: You enter $10,000.

Step 2: Add your variable cost per unit

This is the amount it costs you to produce one unit. That includes materials, packaging, direct labor, or commissions.

• Example: You enter $25.

Step 3: Enter your selling price

This is how much you charge for one unit. It can be a product, a subscription, or a service.

• Example: You enter $50.

Step 4: Enter your current sales volume

This is how many units you’re currently selling each month or year. It helps calculate your current profit or loss.

• Example: You enter 300 units.

Step 5: Add your max capacity

If you know the maximum number of units you can sell or produce, add it here. It helps power the visual chart.

• Example: You enter 1,000.

Step 6: Choose monthly or annual view

Use the toggle at the top to switch between monthly and annual analysis. Your selection affects the way all numbers update automatically.

Step 7: Review your results

Once you’ve entered your numbers, the calculator shows you everything you need to know about your business’s profitability and break-even analysis.

You’ll see:

• Break-even point — the exact number of units you need to sell to cover all your costs
  • Example: Based on the earlier example input, you need to sell 400 units.
• Break-even revenue — the total dollar amount required to break even
  • Example: That’s $20,000 in sales.
• Contribution margin — how much profit you make per unit sold
  • Example: Each unit gives you $25 in profit.
• Contribution margin ratio — the percentage of your revenue that goes toward fixed costs and profit
  • Example: That’s 50%.
• Profit or loss — based on your current sales, are you ahead or behind?
  • Example: At 300 units, you’re losing $2,500.
• Margin of safety — how much buffer you have above break-even
  • Example: You’re 100 units above break-even.
• Margin of safety % — the percentage buffer over your break-even volume
  • Example: That’s a 20% margin of safety.

You’ll also see a clear visual chart showing your revenue, total costs, fixed costs, profit, break-even point, and current sales, which updates in real time as you enter your numbers.

Key terms you should know to use the calculator

Understanding a few basic terms can make a big difference when analyzing your break-even point. Here’s a quick glossary to help you get the most out of this calculator.

Fixed costs

The expenses that stay the same no matter how much you sell, including rent, salaries, insurance, and most overhead.

• Example: Your rent, software & salaries add up to $10,000 monthly

Variable cost per unit

The direct costs that go up with each unit you produce or sell. Think materials, packaging, and fulfillment, etc.

• Example: Each item you sell costs $25 to produce and ship. This includes things like worker pay, shipping costs, materials, sales commission, and a dedicated graphic designer for the product
• example : dedicated Graphic designer for this product, Shipping and delivery fees
• Graphic desiner per month = $600
  $600/40 (units) = $15 

Worker pay, Shipping, Materials, Sales commission

Selling price per unit

The amount you charge your customer for one unit of your product or service.

• Example: You sell your product for $50 per unit.

Contribution margin

How much money each unit contributes toward covering your fixed costs and generating profit.

• Example: $50 selling price – $25 variable cost = $25 contribution margin.

Contribution margin ratio

What percentage of each dollar in sales is profit after variable costs.

• Example: $25 ÷ $50 = 50% contribution margin ratio.

Break-even point

The number of units you need to sell to cover all your fixed and variable costs without making a profit or a loss.

• Example: $10,000 in fixed costs ÷ $25 margin = 400 units to break even.

Break-even revenue

The total sales dollars needed to break even.

• Example: 400 units × $50 selling price = $20,000 in revenue to break even.

Profit/loss

The amount of money you’re currently making or losing based on your current sales.

• Example: 300 units × $50 – $10,000 – (300 × $25) = –$2,500 (a loss).

Margin of safety

The cushion between your current sales and your break-even point.

• Example: Selling 500 units with a break-even of 400 = 100 units of margin.

Margin of safety (%)

The percentage of your current sales that exceed your break-even point.

• Example: 100 extra units ÷ 500 total = 20% margin of safety.

How does it work? The formula behind the calculator

Want to understand exactly how this calculator gets its results? Here’s a breakdown of the formulas it uses behind the scenes.

1. Contribution margin (profit per unit)

This is how much profit you make on each unit sold after covering your variable costs.

Formula:
Selling price – Variable cost

Example:
  $50 – $25 = $25

2. Contribution margin ratio (profit percentage)

This shows what percentage of each dollar in sales becomes profit.

Formula:
(Contribution margin ÷ Selling price) × 100

Example:
  ($25 ÷ $50) × 100 = 50%

3. Break-even point in units

The number of units you need to sell to cover all your costs.

Formula:
Fixed costs ÷ Contribution margin

Example:
  $10,000 ÷ $25 = 400 units

4. Break-even revenue

The total sales dollars needed to reach your break-even point.

Formula:
Break-even units × Selling price

Example:
  400 × $50 = $20,000

5. Current profit or loss

How much money you’re currently making or losing.

Formula:
(Units sold × Selling price) – Fixed costs – (Units sold × Variable cost)

Example:
  (300 × $50) – $10,000 – (300 × $25) = –$2,500

6. Margin of safety

How many units you’re selling above your break-even point. It shows how much room you have before falling into a loss.

Formula:
Current sales – Break-even units

Example:
  500 – 400 = 100 units

7. Margin of safety (%)

The margin of safety as a percentage of your total sales. It shows what portion of your sales is “safe,” meaning above break-even.

Small businesses should ideally aim for at least 20%. This gives you enough buffer to weather slow months, rising costs, or unexpected changes without dipping into the red.

Formula:
(Margin of safety ÷ Current sales) × 100

Example:
(100 ÷ 500) × 100 = 20%

When to use the Break-Even Calculator

If you’re running a small or mid-sized business, this calculator can help you make smarter, faster decisions about pricing, expansion, and overall financial health. Here are the best times to use it:

1. When you’re launching a new product or service

Before investing time and money, knowing how many units you need to sell is critical to break even. This calculator gives you that number, so you can gauge if your plan is viable or needs adjustment.

2. When you’re setting or adjusting prices

If your margin is too thin, you’ll have to sell a ton to stay afloat. Use this tool to see how changes to your selling price or variable costs affect your break-even point.

3. When your costs change

Whether it’s a rent hike or a better deal on supplies, your break-even point shifts every time your cost structure changes.

4. When you’re forecasting or budgeting

If you’re planning for a new quarter or year, plug in your targets and see how close you’ll be to profitability, or how much cushion you have.

Each of these numbers tells a piece of your financial story. Together, they show whether your business is sustainable, and where to adjust if it’s not.

Other Sonary calculators to try

The Break-Even Calculator is just one tool in Sonary’s decision-making toolkit. If you’re ready to go deeper into your numbers, these calculators can help you plan smarter, price better, and grow more confidently.

Profit Calculator

Understand how much you’re making on each sale. Just plug in your cost and selling price, and the calculator shows you your margin in seconds.

Credit Card Processing Fee Calculator

See what you’re really paying to accept credit cards — and find the most cost-effective processor based on your actual numbers.

Employee Cost Calculator

Hiring someone new? This calculator reveals the full cost of a new hire, from salary to benefits to overhead, so you’re never surprised.

Pricing Strategy Tool

Struggling with how to price your product or service? This tool walks you through different pricing models to find the one that best fits your business goals and margins.

Marketing Planner

Estimate how much to spend, when to spend it, and what results to expect from your marketing campaigns. Plan confidently and stay on budget.

These calculators work independently, but together, they give you a complete view of your business finances. Use them to move faster, grow smarter, and make decisions you can trust.