Break-even calculator
How much you need to sell before the business makes money, and how much more before it makes what you want it to.
How this is calculated
Contribution per unit is the price less the variable cost. It is what each sale actually puts towards the fixed costs.
Break-even is fixed costs divided by contribution. Below that number you are losing money, above it every unit is profit.
The profit target line adds your target to the fixed costs before dividing, which shows the volume needed rather than the volume you hope for.
If contribution is zero or negative, no volume will save it. Selling more of something that loses money on every sale loses more money.
Rates used · 2026/27
| Contribution | price less variable cost |
| Break-even | fixed costs divided by contribution |
| Above break-even | every unit is contribution to profit |
| VAT | excluded, work in net figures throughout |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
At £45 a unit with £18 of variable cost, each sale contributes £27, a 60% margin. Against £3,500 of fixed costs you break even at 130 units a month, or £5,833 of revenue. To clear £2,000 of profit on top you need 204 units.
Common questions
What counts as fixed rather than variable?
Fixed costs happen whether you sell anything or not. Variable costs only exist because a sale happened. Rent is fixed, packaging is variable, and a delivery driver on a per-drop rate is variable.
Should I include my own pay?
If you need to be paid to keep doing this, yes, put it in fixed costs. Leaving it out produces a break-even figure that quietly assumes you work free.
What about VAT?
Work in net figures throughout. If you are VAT registered, VAT is not yours to keep, so including it overstates both price and revenue.
Why does contribution margin matter more than price?
Because a high price with a high variable cost can contribute less than a lower price with a low one. Margin is what pays your rent, not revenue.