Break-even Calculator
Find the sales volume and revenue needed to cover fixed and variable costs.
LedgerKit provides estimates based on the information entered and the configured rates. Results do not constitute accounting, tax or legal advice. Check the latest official guidance or consult a qualified professional before acting on a calculation.
How this calculator works
Enter fixed costs for one consistent period, then the selling price and variable cost per unit. A unit can be an item, job, booking or billable hour. Use the same VAT basis throughout; figures excluding VAT are usually clearest for a VAT-registered business.
Contribution per unit is selling price minus variable cost. Exact break-even volume is fixed costs divided by contribution per unit. The minimum whole-unit result rounds that figure up so the estimated contribution covers the fixed costs.
This is a single-product estimate. For several products, use a stable weighted-average selling price and variable cost only if the sales mix is expected to remain broadly constant.
Worked example
£10,000 fixed costs, a £6 selling price and £2 variable cost gives £4 contribution per unit. £10,000 ÷ £4 means 2,500 units, or £15,000 of sales revenue, to break even.
Frequently asked questions
What should I include in fixed costs?
Include costs that stay broadly unchanged across the chosen period, such as rent, insurance and core salaries. Keep every fixed-cost figure on the same monthly, quarterly or annual basis.
What is a variable cost per unit?
It is a direct cost that changes with each unit sold, such as materials, packaging, sales commission or delivery. Include only costs that relate to the same unit as the selling price.
Why are exact and whole-unit figures different?
The formula can produce a fraction. If you sell indivisible products, round up to the minimum whole-unit figure. If a unit can be divided, such as billable hours, the exact figure may be more useful.
Can I use this for several products or services?
Only as a planning estimate using a stable weighted-average price and variable cost. A changing sales mix, stepped costs, discounts, capacity limits or seasonality can move the real break-even point.
Does the result include VAT or tax on profits?
No tax is calculated. Use selling prices and costs on a consistent VAT basis, and treat the result as an operating estimate before tax and any costs you have not entered.