Break-Even Calculator for Small Business
Find how many sales you need each month to cover operating costs, then test a profit target. Use one product, one service or a realistic average sale.
An example is loaded. Replace it with your figures. All amounts are AUD.
- Contribution per sale
- $85.00
- Sales to break even / month
- 30
- Revenue from those sales
- $3,600.00
- Sales for your profit target / month
- 89
($2,500.00 fixed costs + $5,000.00 target profit) ÷ $85.00 contribution = 89 whole sales, rounded up. Assumes one product or a stable average sales mix.
This is an operating-profit estimate before income tax. Include owner pay in costs if you want it covered; loan principal and startup outlays need a separate cash-flow budget.
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The break-even formula
Break-even sales = fixed costs ÷ (selling price − variable cost per sale). The amount left from each sale is its contribution: it pays for overheads before it becomes profit.
In the starting example, a $120 sale costs $35 to fulfil, leaving $85. With $2,500 monthly overheads, the calculation is 29.41 sales. You need 30 whole sales, producing $3,600 revenue and $50 operating profit after those costs.
Turn a target into a sales requirement
To target $5,000 operating profit with the same numbers, divide $7,500 by $85. That requires 89 whole sales. Check whether your available hours, customer demand and capacity can support that workload.
If your price does not exceed variable costs, increasing sales cannot cover your overheads. The calculator stops instead of presenting a misleading break-even figure. Test a higher price, lower fulfilment cost or a different offer.
What to include and what to keep separate
Use a consistent monthly period for overheads. Include owner remuneration if your goal is to cover it, without counting it twice in the profit target. If your sales mix changes substantially, calculate each offer's contribution before relying on a blended average.
For a GST-registered business claiming relevant credits, use GST-exclusive figures. Otherwise include unrecoverable GST in costs. Loan principal, asset purchases and collection delays can create cash shortages even when operating profit is positive, so maintain a separate cash-flow forecast.
Common questions
Is break-even revenue the same as profit?
No. Break-even means contribution covers the costs included in the model. Revenue is total sales; profit is what remains after costs.
Does this work for services?
Yes. Treat one job, package or billable hour as a sale. Include variable labour and materials consistently, then compare the required volume with your capacity.
Put the result to work
Sources and assumptions
Formula notes checked 5 September 2026. Examples are illustrative; these tools provide general information.