What is the difference between break-even and profit?

Break-even is where profit is exactly zero. Below it you are losing money; above it, each further sale adds its whole contribution to profit.

Should my own salary be a fixed cost?

If you take a regular amount regardless of sales, yes — otherwise break-even will look achievable while you are not actually being paid.

Why is break-even revenue not the same as my fixed costs?

Because the revenue also has to cover the variable cost of every unit sold along the way. In the first example, SAR 20,000 of revenue covers SAR 8,000 of materials and SAR 12,000 of fixed costs.

What is a contribution margin?

The contribution as a percentage of the price. At 60%, sixty cents in every riyal of sales is left to cover fixed costs and then become profit. It is the number to compare between products.

Do I need an account to use the calculator?

No. It is a public page and runs in your browser — nothing you type is uploaded or stored.

Break-even: how many you must sell before you stop losing money

Break-even is not a sales target. It is the point where the month stops costing you money — and the number that tells you whether a price is viable before you commit to it.

By Naeem AhmedReviewed 18 September 20265 min read

The idea in one line

Every sale leaves something behind after the cost of making that particular sale. That leftover is called the contribution, and break-even is simply how many contributions it takes to cover the bills you pay whether you sell anything or not.

So you need three numbers, and getting the second and third into the right boxes is most of the work.

The three inputs

Input	What belongs in it
Fixed costs	What you pay regardless of sales — rent, salaries, subscriptions, insurance.
Price per unit	What the customer pays for one.
Variable cost per unit	What that one unit costs you — materials, packaging, the payment fee, delivery.

The formulas

contribution = price − variable cost

break-even units = fixed costs ÷ contribution

break-even revenue = break-even units × price

contribution margin = contribution ÷ price × 100

The share of each sale that is left to cover fixed costs and then become profit.

A worked example

A small workshop pays SAR 12,000 a month in rent, wages and subscriptions. Each item sells for SAR 250 and costs SAR 100 in materials and packaging.

Example: SAR 12,000 fixed, SAR 250 price, SAR 100 variable

Contribution — 250.00 − 100.00: SAR 150.00
Break-even units — 12,000.00 ÷ 150.00: 80 units
Break-even revenue — 80 × 250.00: SAR 20,000.00
Contribution margin — 150.00 ÷ 250.00: 60.00%

Unit 81 is the first one that makes money. Everything up to 80 was paying the rent.

Read that as a daily number and it becomes usable: 80 units across 26 working days is about 3 a day. That is a thing you can check against on a Wednesday afternoon, which "break-even is SAR 20,000" is not.

Why the answer rounds up

The numbers rarely divide evenly, and the leftover matters. The Break-Even calculator shows both the exact figure and the whole units, and the whole units always round up — you cannot sell part of a unit, and stopping at the lower number leaves you short.

Example: SAR 5,000 fixed, SAR 180 price, SAR 65 variable

Contribution — 180.00 − 65.00: SAR 115.00
Break-even units — 5,000.00 ÷ 115.00: 43.48 units
Whole units to sell: 44 units
Break-even revenue: SAR 7,826.09

Selling 43 leaves you SAR 55 short of covering the fixed costs. Rounding down is the one direction that is always wrong.

The two cases with no answer

Sometimes there is no break-even point, and this is the part a formula on its own will not tell you. The calculator refuses to print a number in both cases rather than showing something that looks like a target.

When the answer is "there isn't one"

The price is below the variable cost. Each sale loses money before the rent is even considered, so selling more widens the loss. No volume fixes this — only a higher price or a lower cost does.
The price exactly equals the variable cost. Every sale washes its own face and contributes nothing towards the fixed costs, so they are never covered however many you sell.

Using it to make a decision

Break-even is most useful before you commit to something, not as a monthly report. Three questions it answers well:

Can I afford this price?
Work out the break-even volume at the price you were about to quote. If it is more than you could realistically sell, the price is wrong — not the sales plan.
Can I afford this cost?
Add a new subscription or a hire to the fixed costs and re-run it. The rise in break-even units is what that commitment actually costs you, expressed in sales.
What does a discount do to it?
A price cut comes straight out of the contribution, so break-even rises faster than the discount looks. See what a discount really costs.

Frequently asked questions

What is the difference between break-even and profit?: Break-even is where profit is exactly zero. Below it you are losing money; above it, each further sale adds its whole contribution to profit.
Should my own salary be a fixed cost?: If you take a regular amount regardless of sales, yes — otherwise break-even will look achievable while you are not actually being paid.
Why is break-even revenue not the same as my fixed costs?: Because the revenue also has to cover the variable cost of every unit sold along the way. In the first example, SAR 20,000 of revenue covers SAR 8,000 of materials and SAR 12,000 of fixed costs.
What is a contribution margin?: The contribution as a percentage of the price. At 60%, sixty cents in every riyal of sales is left to cover fixed costs and then become profit. It is the number to compare between products.
Do I need an account to use the calculator?: No. It is a public page and runs in your browser — nothing you type is uploaded or stored.

The tools behind this

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About the author

Naeem Ahmed builds and runs BuzPulse. These guides describe tools he has built, and they describe how those tools actually behave — including where they stop.

Corrections and questions: nsglobal6@gmail.com