How to calculate your break-even point
4 min read · Updated 2026-10-08
Your break-even point is the number of sales at which you stop losing money. Knowing it turns a vague worry into a target. The maths is short.
The formula
Break-even units = fixed costs ÷ contribution per unit, where contribution per unit is the selling price minus the variable cost of one unit. Fixed costs are what you pay whatever you sell, such as rent and software. Variable costs rise with each sale, such as materials and card fees.
Worked example
Sell fewer than 100 and you lose money that month. Every unit after the hundredth adds 30 to profit.
- Fixed costs for the month: 3,000
- Price per unit: 50; variable cost per unit: 20
- Contribution per unit: 50 − 20 = 30
- Break-even: 3,000 ÷ 30 = 100 units
- Break-even revenue: 100 × 50 = 5,000
For service businesses
Treat one billable hour or one job as the unit. Price per unit is what you charge, and variable cost is the labour and materials that job consumes. Then break-even tells you how many hours or jobs you need each month.
What to do with the result
- If it looks out of reach, test a higher price, lower variable cost or lower fixed costs in the calculator
- Compare it with your real monthly sales from your records
- Revisit it whenever your costs or prices change
Frequently asked questions
What if the contribution per unit is zero or negative?
Then each sale loses money or earns nothing, so no volume breaks even. Raise the price or cut the variable cost.
Should I round break-even up?
Yes. You cannot sell part of a unit, so round up to the next whole unit, as the calculator does.
Does break-even include my own pay?
Only if you include it in fixed costs. Many owners add a target salary so that break-even means break-even after paying themselves.
Put it into practice
BusinessPilotOS connects quotes, jobs, invoices, payments and costs, so the numbers in this guide come straight from your own records.