How can I lower my break-even point?

Raise prices, cut variable costs per unit (sourcing, shipping, fees) or reduce fixed costs. A small price increase often moves break-even more than cost cuts.

Should depreciation be a fixed cost?

Yes, for accounting break-even. For cash break-even, use cash fixed costs including loan repayments instead of depreciation.

Does break-even work for service businesses?

Yes — use billable hours or projects as units and direct delivery costs (contractor fees, tools) as variable costs.

Can I rely on this calculator's result for filing?

Use it as a planning estimate. The final figure depends on the tax year's rules and your exact documents, so a CA should review it before you file or pay.

Does the calculator store my data?

No. The calculation runs in your browser and nothing you type is saved. If you want a CA to review it, share your documents through our checklist-led process.

Business calculator

Break-Even Analysis

Break-even is the sales level at which revenue exactly covers fixed and variable costs. Divide monthly fixed costs by contribution per unit (price minus variable cost) to get break-even units, or by the contribution margin ratio to get break-even revenue. Anything sold above it contributes to profit.

Break-even units: Fixed costs ÷ contribution per unit
Break-even revenue: Fixed costs ÷ contribution ratio
Use it for: Pricing and hiring decisions

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Break-Even Analysis

Find the sales volume needed to cover all costs and reach your profit target.

Break-Even

Total fixed costs (₹ / period)

Rent, salaries, insurance, depreciation, etc.

Selling price per unit (₹)

Variable cost per unit (₹)

Raw materials, direct labour, packaging, etc.

Target profit (₹ / period)

Contribution Margin

Per unit contribution

₹200.00

Contribution margin ratio

40.0%

Break-Even Point

Units to sell

2,500

Revenue needed

₹12,50,000

To Reach Target Profit

Units to sell

3,500

Revenue needed

₹17,50,000

Break-even analysis is for a single product. For multi-product businesses, use weighted average contribution margin. Taxes not included — subtract tax from profit target for after-tax planning.

Formulas

Measure	Formula
Contribution per unit	Selling price − variable cost per unit
Contribution margin ratio	Contribution ÷ selling price
Break-even units	Fixed costs ÷ contribution per unit
Break-even revenue	Fixed costs ÷ contribution margin ratio
Units for target profit	(Fixed costs + target profit) ÷ contribution per unit
Margin of safety	(Actual sales − break-even sales) ÷ actual sales

Getting the inputs right

Fixed: rent, salaries, software subscriptions, loan EMIs, insurance
Variable: raw material, packaging, shipping, payment gateway and marketplace fees, commissions
Use prices net of GST — GST collected isn't revenue
Rerun it whenever prices, costs or the team change

Worked example: D2C product brand

1Fixed costs ₹6,00,000 a month; selling price ₹1,000 (excluding GST); variable cost ₹600.
2Contribution = ₹400 per unit; ratio = 40%.
3Break-even = ₹6,00,000 ÷ ₹400 = 1,500 units, or ₹15 lakh revenue a month.

Selling 2,000 units gives ₹2 lakh profit and a 25% margin of safety.

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