Break-even Calculator: Find How Much You Need to Sell to Cover Costs

The break-even point is where total revenue equals total costs. Below it you lose money; above it you make money. A break-even calculator gives you that number so you can set targets and price correctly.

Freelancers use it to answer: How many billable hours do I need this month? How many units must I sell? It also helps when adding a fixed cost (e.g. new software): you see how much extra revenue you need. Break-even is a floor, not a target—aim above it for profit.

What Does This Tool Do?

Three inputs: fixed costs per period, price per unit (or hour), and variable cost per unit. Fixed costs don’t change with output (rent, insurance, software). Variable costs do (materials, subcontractors per project).

The tool computes contribution per unit (price minus variable cost), then break-even units and break-even revenue. For freelancers, treat one billable hour as one unit: fixed costs = monthly overhead, price per hour = your rate. Break-even units = hours you must bill to cover fixed costs; break-even revenue = that number × your rate.

How to Use It (Step-by-step)

1
Enter fixed costs per period. Use a consistent period (e.g. one month). Include rent, insurance, software, and the minimum you need to pay yourself.
2
Enter price per unit or per hour. Use your actual or planned selling price.
3
Enter variable cost per unit or per hour. For services, that might be subcontractor cost or tools per project; for products, materials and direct labour per unit.
4
Read break-even units (or hours) and break-even revenue. That is the minimum you need to sell in the period to cover all costs.
5
Use the result to set monthly or quarterly targets. Aim above break-even for profit.

Key Features

Fixed and variable costs: separates costs that do not change from costs that do.

Works for units or hours: use it for products or for billable hours.

Shows contribution per unit: see how much each sale contributes to fixed costs.

Break-even revenue: see the minimum revenue needed, not just units.

Use Cases

Use case 1

Setting a monthly billable-hours target so you know your minimum workload.

Pricing a product

see how many units you must sell at a given price to break even.

Deciding whether to take on fixed costs

see how much more you need to sell to cover them.

Planning

use break-even as a floor and set profit targets above it.

Evaluating a new fixed cost

add the new cost to fixed costs and see how many more units or hours you need to sell to break even.

FAQ

Fixed costs do not change with output (rent, insurance). Variable costs do (materials per unit, subcontractors per project). Some costs are mixed; split them for the calculator.

Include the minimum you need to pay yourself to keep the business going. That way break-even reflects the point at which you can sustain the business.

Then contribution is negative and you cannot break even at that price. You need to raise price or lower variable cost.

Treat each billable hour as one unit. Fixed costs are your monthly overhead; variable cost per hour might be subcontractors or tools per project. Price per hour is your rate. The break-even hours tell you how many hours you must bill that month to cover everything.

You need to either reduce fixed costs, raise price, or lower variable cost so that contribution per unit increases and break-even units drop. Otherwise the business model is not viable at current price and cost.

Include the minimum you need to draw to sustain the business. That way break-even reflects the point at which the business (and you) can keep going. Profit above that can be reinvested or taken as additional draw.