Break-even calculator for a product or app

The break-even point is where revenue covers every cost: fixed costs ÷ (price − variable cost per unit) gives the number of units or subscriptions you need to sell. Enter your monthly fixed costs, price and cost per unit to see the break-even volume and revenue.

Only changes how amounts are shown.

Costs that don't change with sales: salaries, rent, software, insurance, loan repayments.

What one customer pays you for one unit, or for one month of a subscription, before tax.

Costs each extra sale adds: materials, payment fees, hosting or support per customer, delivery.

Optional: shows your margin of safety. Leave empty to skip.

Optional: shows the sales you need to earn it. Leave empty to skip.

Break-even point

417 units a month

Exactly 416.67 units, or ₹6,25,000 of revenue a month

Contribution margin per unit
₹1,200Price − variable cost: ₹1,500 − ₹300. What each sale adds towards fixed costs.
Contribution margin ratio
80%₹1,200 ÷ ₹1,500: the share of each sale's revenue left after variable costs.
Break-even units (exact)
416.67₹5,00,000 ÷ ₹1,200. You can't sell part of a unit, so the result rounds up to 417.
Break-even revenue
₹6,25,000Fixed costs ÷ contribution margin ratio: ₹5,00,000 ÷ 80%.
Profit at 417 units
₹400A little above zero, because the break-even point rounds up to a whole unit.
Sales for ₹1,00,000 profit
500 units a month(₹5,00,000 + ₹1,00,000) ÷ ₹1,200 = 500, rounded up.
Revenue for ₹1,00,000 profit
₹7,50,000(Fixed costs + target profit) ÷ contribution margin ratio.
Profit at current sales (500 units)
₹1,00,000500 × ₹1,200 − ₹5,00,000.
Margin of safety
16.67%Sales can fall by 83.33 units (16.67%) before you make a loss.
Monthly profit or loss at volumes around break-even
Units a monthRevenueVariable costsFixed costsProfit or loss
0₹0₹0₹5,00,000−₹5,00,000
104₹1,56,000₹31,200₹5,00,000−₹3,75,200
209₹3,13,500₹62,700₹5,00,000−₹2,49,200
313₹4,69,500₹93,900₹5,00,000−₹1,24,400
416₹6,24,000₹1,24,800₹5,00,000−₹800
417 (break-even)₹6,25,500₹1,25,100₹5,00,000₹400
500 (current sales, target profit)₹7,50,000₹1,50,000₹5,00,000₹1,00,000
521₹7,81,500₹1,56,300₹5,00,000₹1,25,200
626₹9,39,000₹1,87,800₹5,00,000₹2,51,200
834₹12,51,000₹2,50,200₹5,00,000₹5,00,800
  • Assumes one price and one variable cost per unit, and fixed costs that stay the same at every volume shown. For several products or plans, use the average price and average variable cost weighted by how many of each you sell.
  • Target profit is before tax.

How is the break-even point calculated?

Each sale first pays its own variable costs; what is left, the contribution margin, goes towards fixed costs. Break-even is the number of sales whose contribution margins add up to the fixed costs. With ₹5,00,000 of fixed costs a month, a ₹1,500 subscription and ₹300 of variable cost per subscriber, each subscriber contributes ₹1,200, so you need ₹5,00,000 ÷ ₹1,200 = 416.67 subscribers.

You can't sell two-thirds of a subscription, so the calculator rounds the units up: 417 subscribers is the first whole number that covers fixed costs, with ₹400 left over. Break-even revenue doesn't need rounding: it is fixed costs ÷ the contribution margin ratio, ₹5,00,000 ÷ 80% = ₹6,25,000 a month.

A profit target works the same way: add it to fixed costs before dividing. If you enter current sales, the margin of safety shows how far they can fall before you make a loss, as a share of current sales. If the price is at or below the variable cost, each sale adds nothing or loses money, and there is no break-even point at any volume.

contribution margin = price − variable cost per unit
contribution margin ratio = contribution margin ÷ price
break-even units = fixed costs ÷ contribution margin (rounded up)
break-even revenue = fixed costs ÷ contribution margin ratio
units for a target profit = (fixed costs + target profit) ÷ contribution margin
margin of safety = (current sales − break-even units) ÷ current sales

How to work out your break-even point

  1. 1
    Enter your fixed costsAdd up what you pay each month whatever you sell: salaries, rent, software and other overheads.
  2. 2
    Enter the price and variable costType the price of one unit or one month of a subscription, and what each extra sale costs you, such as payment fees, materials or hosting per customer.
  3. 3
    Add current sales and a targetOptionally, enter how many units you sell now to see the margin of safety, and a monthly profit target to see the sales it needs.
  4. 4
    Read the result and the tableThe result shows the break-even units, rounded up, with the exact value and the break-even revenue. The table shows the profit or loss at volumes around it.

Frequently asked questions

What is contribution margin?
It is what each sale leaves after paying its own variable costs: price minus variable cost per unit. A ₹1,500 subscription that costs ₹300 to serve has a ₹1,200 contribution margin, an 80% contribution margin ratio. That ₹1,200 pays towards fixed costs until they are covered, and is profit after that.
Should break-even units be rounded up or down?
Up. Rounding down leaves you a fraction of a unit short, so still at a loss. 416.67 subscribers rounds up to 417, which covers ₹5,00,000 of fixed costs with ₹400 to spare; 416 would leave you ₹800 short.
What does the margin of safety tell you?
How far sales can fall before you make a loss, as a share of current sales. Selling 500 a month against a break-even of 416.67 gives a margin of safety of 16.67%: sales could fall by 83.33 units before the business stops covering its fixed costs.
Which costs of a software product are fixed and which are variable?
Fixed costs stay the same whatever you sell: salaries, office rent, tools and the base cost of your servers. Variable costs grow with each customer: payment gateway fees, per-user hosting or third-party API usage, support time per customer and app store commissions.
How does a lower price change the break-even point?
It raises it, because the whole cut comes out of the contribution margin while the variable cost stays the same. Cutting a ₹1,500 subscription by 20% to ₹1,200, with ₹300 of variable cost and ₹5,00,000 of fixed costs, drops the margin from ₹1,200 to ₹900 and moves break-even from 417 to 556 subscribers, a third more.

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