Profit Margin & Break-Even Calculator
Work out your profit margin percent, profit per sale and how many units you must sell to break even.
The margin is exact for the numbers you enter. Real costs change — re-check them often.
How to use this profit margin and break-even calculator
This profit margin and break-even calculator works out two things at once: the profit margin on your sales, and how many units you must sell to break even. Enter your revenue and costs, and the answers appear straight away.
Step 1: Enter your total revenue — all the money your sales brought in — and your total cost for those sales. The calculator shows your profit and your margin percent.
Step 2: Enter your fixed costs, your selling price per unit and your variable cost per unit. Fixed costs are the bills you pay whatever you sell, like rent. Variable costs are the costs of each unit, like materials.
Step 3: Read the answers: profit per unit, break-even units and break-even sales value. The break-even point is the number of units you must sell before you start making a profit.
Worked example
Say your revenue is $100 and your total cost is $60. Your profit is $100 − $60 = $40.00, and your margin is $40 ÷ $100 = 40.0%.
Now the break-even part. Your fixed costs are $1,000, you sell each unit for $25, and each unit costs you $15. Your profit per unit is $25 − $15 = $10.00.
Divide your fixed costs by your profit per unit: $1,000 ÷ $10 = 100 units. That is your break-even point — sell 100 units and you are exactly at zero. The break-even sales value is 100 × $25 = $2,500.00.
Margin vs markup
Margin and markup sound alike, but they are different numbers. Margin is profit as a share of the selling price; markup is profit as a share of the cost.
On sales of $100 with costs of $60, the profit is $40. The margin is $40 ÷ $100 = 40%. The markup is $40 ÷ $60 = 66.7%. Same sale, different answers — so never mix the two up, and always say which one you mean.
What break-even really means
Break-even is the point where your sales exactly cover your costs — no profit, no loss. Every unit you sell after it is profit; every unit before it is loss.
It only works if your price is above your variable cost per unit. If the price is at or below the cost, you lose money on every sale and no number of sales can fix it — you must raise the price or cut the cost.
And the point moves. If your rent rises, your fixed costs rise and you need more units to break even. If your supplier raises prices, your profit per unit falls and the same thing happens. Check it whenever your costs change.
Frequently asked questions
What is profit margin?
Profit margin is the share of your sales that is profit. If you take $100 and spend $60, your profit is $40 and your margin is 40%.
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. On $100 of sales with $60 of costs, the margin is 40% and the markup is 66.7% — different numbers, so do not mix them up.
What is the break-even point?
The break-even point is where your sales exactly cover your costs — no profit, no loss. Every unit you sell after that point is profit; every unit before it is loss.
What if my price is below my cost per unit?
You lose money on every sale. Raise the price or cut the cost, because no number of sales can fix it — the more you sell, the more you lose.
Is this exact?
It is exact for the numbers you enter, but real costs change — prices, rent and supplier costs all move. Re-check your numbers often.