Break-Even Calculator
Find your break-even point in units and revenue instantly. Essential for pricing, planning and startup financial decisions. Free, no signup.
Break-Even Calculator Tool
What-If Scenario
GST note: Enter all prices ex-GST for accurate contribution margin and break-even calculations. If you are GST-registered, your selling price and variable costs should both be stated excluding GST.
How to Use the Break-Even Calculator
Enter your monthly fixed costs
Include all costs that stay constant regardless of sales volume: rent, full-time staff salaries, insurance, subscriptions and any monthly loan repayments. Hover the tooltip icon for guidance on what counts as a fixed cost.
Enter variable cost and selling price per unit
Variable cost is everything that increases with each unit sold — materials, packaging, per-unit shipping and per-unit commission. Selling price is what the customer pays, excluding GST. Results update instantly as you type.
Read your break-even units and revenue
The calculator shows the minimum units you must sell every month to cover all costs — and the monthly revenue target that represents. The bar chart visualises fixed costs, variable costs and revenue at the break-even point.
Use What-If to test different sales volumes
Enter a target monthly sales volume in the What-If box to instantly see whether that volume generates a profit or a loss. Adjust your fixed costs, variable cost or price to model different scenarios.
Break-Even Analysis — The Essential Number Every Business Must Know
What Is Break-Even Analysis and Why Every Singapore Business Owner Needs to Know Their Number
Break-even analysis identifies the exact point at which total revenue equals total costs — the point where your business makes neither profit nor loss. Understanding this number is not optional; it is the single most important financial calculation a business owner can make before committing to a lease, hiring staff or setting prices, because it turns a cost base into a sales target you can test against what you think you can sell.
The two cost types you need to understand are fixed costs and variable costs. Fixed costs do not change with sales volume: your monthly rent, permanent staff salaries, insurance premiums, utilities and loan interest are the same whether you sell 10 units or 10,000 units that month. Variable costs scale directly with output: raw materials, packaging, per-unit shipping, sales commission and per-unit payment processing fees are all variable. Your break-even point is where the contribution from each unit sold has collectively covered all fixed costs for the month. Loan principal is not a cost, because it repays money you already received; add it to fixed costs only if you want a cash break-even, the sales needed to cover every payment going out.
Rent is usually the largest fixed cost for a shop or restaurant, so a new lease can move the break-even point more than any pricing decision. A common mistake is for entrepreneurs to include only the visible lease cost and forget to add their own salary as a fixed cost. If you intend to pay yourself, your break-even must include that salary — otherwise you are effectively subsidising the business with unpaid labour.
Contribution Margin Explained: The Key to Smarter Pricing Decisions
The contribution margin is the bridge between individual unit economics and overall business profitability. It is calculated as: Selling Price per Unit − Variable Cost per Unit. The result is what each unit sold "contributes" towards covering fixed costs. Once you have sold enough units to cover all fixed costs for the month, every additional unit sold converts its full contribution margin directly into profit.
A higher contribution margin means fewer units are needed to break even. This is why businesses with high-variable-cost, low-margin products are so vulnerable to volume fluctuations — a 10% drop in sales has a disproportionate impact on profit. Conversely, a business whose variable cost per customer is small, such as much software, has a high contribution margin, so once fixed costs are covered each extra sale adds almost its whole price to profit.
For multi-product businesses, the contribution margin shows which items pay for the fixed costs. If Product A contributes $40 a unit and Product B $12, one more sale of A covers more of the overhead, even if B has the higher margin as a percentage. When something else is the real limit (oven time, shelf space, staff hours), compare the contribution per unit of that limit instead. Menu engineering in restaurants applies the same idea: the dish to promote is the one that contributes most, not necessarily the most expensive one.
There is a danger zone to watch for: if your selling price falls below your variable cost, your contribution margin becomes negative. Every unit you sell increases your loss. This can happen through aggressive discounting, rising raw material costs or higher marketplace commission. The warning indicator in this calculator alerts you immediately if this occurs.
Rent is paid out of contribution, not out of price. Before signing a lease, divide it by what each sale contributes and ask whether you can sell that many.
Real Break-Even Examples: F&B, Retail and SaaS Businesses in ASEAN
F&B example — Coffee shop, Singapore: Fixed costs $15,000/month (rent $8,000 + 3 staff $6,000 + utilities and insurance $1,000). Variable cost per cup $1.50 (coffee, milk, cup, lid). Selling price per cup $5.50. Contribution margin = $5.50 − $1.50 = $4.00 per cup. Break-even = $15,000 ÷ $4.00 = 3,750 cups per month — about 125 cups per day for 30 days. Raising the price by $0.50 lifts the contribution to $4.50 and the break-even to 3,334 cups, about 111 a day.
E-commerce example — marketplace seller: Fixed costs $2,000/month (packaging overhead, marketing retainer). Variable cost per unit $7.75 (product cost $5.50 + a 5% marketplace commission, $1.25 on a $25 sale + shipping $1.00). Selling price $25. Contribution margin = $25 − $7.75 = $17.25 per unit. Break-even = $2,000 ÷ $17.25 = 115.9, so 116 units per month. Because the commission is a percentage of price, a discount lowers the commission too, but only by 5% of the cut; the other 95% comes straight off the contribution. Check your own marketplace's current fee schedule; rates differ by category and change.
SaaS example — B2B software, Singapore: Fixed costs $20,000/month (two engineers $14,000, office and tools $4,000, marketing $2,000). Variable cost per subscriber $5/month (cloud hosting, support). Selling price $50/month per subscriber. Contribution margin = $50 − $5 = $45. Break-even = $20,000 ÷ $45 = 444.4, so 445 subscribers. At 500 subscribers the business makes $2,500 a month; at 400 it loses $2,000.
Cut price a tenth on a thirty-point margin and you need half again the volume
Break-even units = fixed costs ÷ contribution margin per unit; break-even revenue = fixed costs ÷ the contribution margin ratio. OpenStax's own example: $18,000 ÷ $80 = 225 units, or $18,000 ÷ 0.80 = $22,500.
A target profit works the same way: add it to fixed costs. ($18,000 + $16,000) ÷ $80 = 425 units in OpenStax's example.
Taxes do not move the break-even point, because at break-even there is no profit to tax. For an after-tax target, gross it up first: pre-tax profit = after-tax profit ÷ (1 − tax rate).
On a $10,000 rent and a $4 contribution per coffee, the rent alone needs 2,500 cups a month, about 83 a day over 30 days.
A 10% price cut on a product with a 30% contribution margin leaves 20 points of contribution, so sales must rise by half (30 ÷ 20 = 1.5) to earn the same total contribution.
A price rise works the other way: lifting the contribution from $10 to $12 cuts the break-even volume to 10/12 of what it was, about 17% fewer units.
A percentage marketplace commission is a variable cost: 5% of a $25 price is $1.25 a unit, taken off the contribution of every sale.
The margin of safety is budgeted or actual sales minus break-even sales; divided by sales it gives the share by which sales can fall before a loss.
Degree of operating leverage = contribution margin ÷ operating income. Multiply it by a percentage change in sales to get the percentage change in operating income.
The model assumes a constant sales mix. With several products, enter the average contribution per unit weighted by that mix; if the mix changes, the break-even point changes with it.
Frequently Asked Questions
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The break-even point is the level of sales at which your total revenue exactly equals your total costs — making neither profit nor loss. It is expressed in units per period (e.g. 500 units/month) and in revenue (e.g. $12,500/month). Selling below this level produces a loss; selling above it produces a profit.
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Fixed costs do not change with output: rent, full-time salaries, insurance, subscription software and monthly loan repayments are all fixed. Variable costs scale with each unit produced or sold: raw materials, packaging, per-unit shipping, sales commission and per-unit payment processing fees are variable. Semi-variable costs (e.g. a part-time worker paid only when needed) can be split between the two categories.
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Contribution margin = Selling Price per Unit − Variable Cost per Unit. It represents how much each unit sold contributes towards covering fixed costs. Once fixed costs are fully covered, each additional unit sold converts its contribution margin entirely into profit. A higher contribution margin means fewer units are required to break even.
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Raising your selling price increases the contribution margin per unit, which directly lowers the break-even volume. For example, if your contribution margin increases from $10 to $12 per unit (a 20% increase), your break-even volume drops by approximately 17%. Even a modest price increase can have a dramatic effect on break-even, which is why pricing is often the fastest lever for improving business viability.
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For multiple products, use the weighted average contribution margin approach: calculate the contribution margin for each product, weight it by its expected share of total sales (sales mix), and use the weighted average as the contribution margin in the break-even formula. This calculator takes one product, so for a mix enter the average selling price and the average variable cost, each weighted by the expected share of units; the break-even units are then total units across the mix, split in those same shares.
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There is no universal "good" break-even point — it depends entirely on your realistic achievable sales volume. The key test is: can you realistically sell above your break-even volume consistently, with a reasonable margin of safety? For a coffee shop, the question is whether 125 cups a day is realistic for that site; count passers-by or a competitor's queue before signing. An e-commerce seller breaking even at 500 units/month needs to verify that market demand supports it before signing warehouse leases.
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You can lower your break-even point by: (1) reducing fixed costs — renegotiating rent, switching to co-working, reducing permanent headcount; (2) reducing variable costs — better supplier terms, bulk purchasing, packaging optimisation; (3) raising selling price — even a 5–10% price increase dramatically improves contribution margin. Use this calculator to model the impact of each change before implementing it in your business.
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Standard break-even analysis does not account for income tax, as taxes are calculated on profit — not on the break-even quantity itself. For after-tax break-even, divide your desired after-tax profit (zero, in the basic break-even case) by (1 − tax rate) to find the required before-tax profit, then add that to fixed costs. For most early-stage SME planning, the standard pre-tax break-even is sufficient.
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Break-even is the minimum viability threshold: zero profit, zero loss. Profitability begins only after you exceed the break-even point. For a business to be sustainably profitable, it needs to sell consistently above break-even with a sufficient margin of safety — how much of a buffer is enough depends on how much sales swing from month to month. Use the What-If scenario in this calculator to model target profit levels: enter your desired monthly profit and add it to fixed costs, then recalculate break-even.
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Yes — 100% free, forever. No account, no subscription, no hidden limits. RECATOOLS is free to use, with no paywall — we plan to fund it with contextual advertising, shown only with your consent. All features — break-even calculation, contribution margin, what-if scenario and the bar chart — are available with no restrictions and no sign-in required.
Method & sources
How it computes
Contribution margin = price - variable cost per unit; break-even units = fixed costs / contribution margin (NaN unless it is positive); break-even revenue = units x price = fixed costs / contribution-margin ratio; what-if profit = units x contribution margin - fixed costs. RecaPricing.breakEven / profitAt, tested on OpenStax's own example (225 units, $22,500).
What this tool implements
- Prose corrected: the marketplace example's variable cost is $7.75, not $8 (5% of $25 is $1.25), so break-even is 116 units, not 118; the price-cut fact now names the contribution margin, not the gross margin; loan principal is no longer called a cost (add it only for a cash break-even); the multi-product FAQ now uses a mix-weighted average instead of splitting fixed costs.
- Removed as unsourced or unsupported: '60% of Singapore SMEs fail within three years', 'research consistently shows' SMEs never calculated break-even, a 40% HDB commercial rent rise, hawker rents, Shopee fee ranges, SaaS 70-90% margins, Jurong/one-north and GoFoodFestival claims, the Rautenstrauch and Harris attributions, a '20-30% healthy buffer', and an unattributed pull-quote.
Sources
- OpenStax. Principles of Managerial Accounting, 3.2 Calculate a Break-Even Point in Units and Dollars. https://openstax.org/books/principles-managerial-accounting/pages…
- OpenStax. Principles of Managerial Accounting, 3.5 Calculate and Interpret a Company's Margin of Safety and Operating Leverage. https://openstax.org/books/principles-managerial-accounting/pages…
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