Break-Even Calculator
Break-even is where revenue equals total costs. Break-even units equals fixed costs divided by selling price minus variable cost per unit. With £50,000 fixed costs, £20 variable cost and a £50 price, you break even at 1,667 units. Every unit above that is profit. Enter your figures below.
Calculation method: Net position arithmetic. This tool runs a model on the figures you enter, so there is no official rate table behind the result.
Calculator
Costs that don't change with output: rent, salaries, insurance, loan repayments, software subscriptions.
Costs that increase with each unit produced or sold: materials, packaging, direct labour, commission.
The price each unit is sold for. Must be higher than variable cost to make a contribution.
How many units and revenue do you need to reach a specific profit target?
What this calculation assumes
The result adds the amounts you enter and subtracts the ones you enter as outgoings. There is no external data set behind it: the output is only as good as your inputs.
- Every figure comes from you; nothing is estimated from national averages
- Values are point-in-time and are not tracked or stored
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How Break-Even Calculator Works
We calculate contribution per unit (selling price minus variable cost), then divide fixed costs by that contribution. Each unit sold contributes this amount toward covering fixed costs; once all fixed costs are covered, every additional unit is profit.
Target profit extension
Add a target profit figure to see how many units and what revenue is needed to achieve it. Useful for sales planning and goal-setting.
Margin of safety
We show the margin of safety between your target sales and break-even: the buffer before losses start. A larger margin of safety means a more resilient business.
Frequently Asked Questions
Break-even units = Fixed Costs / (Selling Price - Variable Cost per Unit). The denominator (Selling Price - Variable Cost) is called 'contribution per unit': the amount each unit contributes toward covering fixed costs. Once all fixed costs are covered, every additional unit sold generates pure profit.
Margin of safety = (Actual/Planned Sales - Break-Even Sales) / Actual/Planned Sales x 100. It shows how much sales can decline before you start making a loss. A 30% margin of safety means sales can fall by 30% before you reach break-even. Higher is better; a business with a thin margin of safety is more vulnerable to downturns.
Fixed costs stay the same regardless of output: rent, salaries, insurance, loan payments, software subscriptions. Variable costs change with production: raw materials, packaging, direct labour (if paid per unit), sales commissions, merchant fees. Some costs are 'semi-variable' (e.g., utilities have a fixed element and a usage element), so allocate these pragmatically.
Break-even analysis shows the minimum viable price given your cost structure. If your fixed costs are £50,000 and variable costs are £20/unit, you need to sell at more than £20 to make any contribution. At £30 (£10 contribution), you need to sell 5,000 units to break even. At £50 (£30 contribution), only 1,667 units. Pricing decisions become much clearer.
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Sources and method
This calculator has no external rate table behind it. The result comes from the figures you enter and the model described in our methodology.
Method: Net position arithmetic.
Spotted a figure that looks wrong? Report a correction and we will check it against the source above.
Further reading
Background references used while writing this page. The sources behind the calculated figures are listed above.
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.