Break-Even Point — The Math, With a Calculator
General information only — not financial or tax advice
Checked November 2026.
The idea in one paragraph
Your break-even point is the number of items you must sell in a month just to cover your costs — no profit, and no loss. Sell fewer than that and you lose money that month. Sell more than that and the extra sales start to make a profit. This page shows the simple math behind that number, step by step, and gives you two small calculators that use only numbers you type in.
The three numbers you need
- Fixed costs — costs that stay the same for the month no matter how much you sell. Examples: rent, insurance, permit fees.
- Variable cost per item — what one more item costs you. Examples: materials, packaging, the card fee on that sale.
- Selling price per item — what a buyer pays you for one item.
From the price and the variable cost, you get one more number:
Contribution margin per item = selling price − variable cost per item.
In plain words: the margin is what is left from each sale to help cover your fixed costs.
The formula, with a worked example
Break-even items = fixed costs ÷ contribution margin per item.
Break-even dollars = break-even items × selling price.
EXAMPLE — made-up round numbers
Fixed costs: $1,200 a month.
Price: $25 per item.
Variable cost: $15 per item.
Step 1 — Margin: $25 − $15 = $10 per item.
Step 2 — Break-even items: 1,200 ÷ 10 = 120 items.
Step 3 — Break-even dollars: 120 × $25 = $3,000.
So in this example, you must sell 120 items, for $3,000 in sales, just to cover your costs.
Profit or loss at any number of sales
Profit or loss = (items sold × margin) − fixed costs.
At 150 items in the example: 150 × $10 − $1,200 = $1,500 − $1,200 = $300 profit.
At 100 items in the example: 100 × $10 − $1,200 = $1,000 − $1,200 = −$200, which is a $200 loss.
If the price is the same as the variable cost, or less than it, there is no break-even point. Every sale loses money or adds nothing, so no number of sales can cover your fixed costs.
Calculator A — Find your break-even point
Type in your own numbers. Nothing you type is sent or stored — the math runs on this page, in your browser.
Calculator B — Profit or loss at a number of sales
Use the same three numbers, and add how many items you expect to sell. Nothing you type is sent or stored — the math runs on this page, in your browser.
Common mistakes
- Counting a one-time cost as monthly. Fixed costs here are the costs for one month. A cost you pay only once does not belong in the monthly fixed costs number.
- Forgetting your own pay. Your own pay is not in this math unless you put it in fixed costs. If you want the math to cover pay for yourself, add that pay amount to fixed costs first.
- Mixing up markup and margin. Markup and margin are different numbers. This page uses margin — selling price minus variable cost per item — and it does not compute markup.
General information only — not financial or tax advice
Checked November 2026.