Free tool
Break even calculator (UK)
Enter your fixed costs, selling price and variable cost per unit and you get your break even point in units and revenue instantly, plus your margin of safety at the sales level you expect. The working is shown so you can sanity check a quote before you commit to it. No sign up needed for the calculator.
Enter your costs and price to see the working.
Quick answer
Break even units = fixed costs ÷ (price per unit − variable cost per unit). With £10,000 of fixed costs, a £25 price and £15 variable cost, each unit contributes £10, so you break even at 1,000 units or £25,000 of revenue. Anything you sell above that is profit; margin of safety measures how much sales can fall before you drop below it.
How the break even maths works
- Contribution per unit: selling price minus variable cost per unit. This is what each sale actually contributes towards your fixed costs.
- Break even units: fixed costs ÷ contribution per unit. Below this volume you lose money, above it every unit is profit.
- Break even revenue: fixed costs ÷ contribution margin ratio. Handy when you think in turnover rather than units.
- Margin of safety: expected sales minus break even sales, shown in units, revenue and as a percentage of expected sales.
- The common mistake: pricing from gut feel and hoping volume sorts it out. If the contribution per unit is small, the break even volume is usually far higher than people expect.
This is the standard single-product model: it assumes your price and unit cost stay constant across the volume range and that fixed costs really are fixed for the period. Rates last checked: 15 July 2026 (no tax rates are used on this page, the maths is pure cost and price).
Get the Break Even and Pricing Workbook
Go beyond one product. The workbook runs the same break even maths in Excel and adds a multi-product contribution margin sheet, so you can see which lines actually carry your fixed costs and test price changes across the whole range. Enter your details and the Excel file downloads immediately.
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How do I calculate my break even point?
Divide your fixed costs by the contribution per unit (selling price minus variable cost per unit). If fixed costs are £10,000, the price is £25 and the variable cost is £15, contribution is £10, so you break even at 1,000 units, which is £25,000 of revenue.
What is the break even formula?
Break even units = fixed costs ÷ (price per unit − variable cost per unit). Break even revenue = fixed costs ÷ contribution margin ratio, where the ratio is contribution per unit divided by the price.
What counts as a fixed cost and what is a variable cost?
Fixed costs stay the same whatever you sell: rent, salaries, insurance, software subscriptions, loan repayments. Variable costs rise with every unit: materials, packaging, payment processing fees, delivery, sales commission. If a cost only exists because you made a sale, it is variable.
What is margin of safety and why does it matter?
Margin of safety is how far your expected sales sit above break even, in units, revenue or as a percentage. Selling 1,500 units with a 1,000 unit break even gives a 33% margin of safety, meaning sales can fall a third before you start losing money. A thin margin of safety is an early warning that pricing or costs need attention.
What if my price is lower than my variable cost per unit?
Then every sale loses money and no volume of sales will ever break even. You need to raise the price, cut the variable cost per unit, or stop selling that line. This calculator flags that situation rather than showing a misleading number.
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