Break-Even Calculator
The break-even formula is the same everywhere: fixed costs divided by contribution margin. What differs is what goes into fixed costs, and almost every calculator leaves out the largest one for a business with a single owner.
Costs that do not move with sales
Rent, software, insurance, staff salaries. Everything you pay whether you sell one unit or a thousand.
Your own drawings, per month. This is a cost of the business, not its profit. No other break-even calculator we found has this field.
Per unit
Materials, packaging, payment fees, delivery. Zero is fine if you sell your time.
Optional. Gives you margin of safety.
GST position
You break even at
220 units a month
- Revenue needed
- ₹1,76,000
- Contribution per unit
- ₹500
- Contribution margin
- 62.5%
- Total fixed costs
- ₹1,10,000
Paying yourself is 45% of your fixed costs. Leave it out, as every other break-even calculator we found does, and the answer drops to 120 units. That lower number is the one most tools would show you, and it is the point at which the business covers its bills while paying you nothing.
One thing worth knowing before you treat this as safety. Presumptive tax under section 58 is charged on turnover, not profit, at 6% where receipts arrive by bank or online and 8% otherwise. At break-even turnover that is about ₹10,560 of deemed profit taxed even though you made none. There is no zero-tax break-even under section 58. The alternative is claiming lower actual profits, which pulls you into books and audit, itself a fixed cost.
This is an operating figure, before tax and interest. Every calculator we read produces the same thing and none of them says so, with two labelling it net profit. It also assumes one product at one price: selling several at different margins needs a weighted average contribution margin, which no tool in the field computes. And it assumes fixed costs stay flat, when in reality they step up when you hire, so check the answer again after any change that adds a fixed cost.
Cite this calculator
Using this in an article, a report or a class? Please credit it, and link back so readers can run the numbers themselves.
The Money Decoded. "Break-Even Calculator (India and US)." https://themoneydecoded.com/calculators/break-even
The embed drops this calculator straight into your page as a working tool. It is 2300px tall by default and full width, so change the height if your column is much wider or narrower than ours.
The cost every other calculator forgets
If you run the business, what you need to pay yourself is a cost of running it, not a share of its profit. Leave it out and break-even looks far closer than it is.
On the figures this page opens with, counting the owner's pay puts break-even at 220 units a month. Leave it out and the answer is 120. That lower number is what every other calculator would show you, and it is the point at which the business covers its bills while paying you nothing.
Of thirty-one calculators and articles we read across both countries, not one had a field for it. Salaries in those tools always mean employees. The US Small Business Administration's own itemiser labels the field "Amount paid per month for yearly or termed salaried employees". Corporate Finance Institute says "executive salaries". The sharpest example is a tool built explicitly for solo plumbers and electricians, which files "Hourly labor or subcontractors" under variable costs, so the founder's own time is either uncounted or treated as variable.
The effect is larger in the US example on this page, where including it moves break-even from 106 units to 237.
Break-even is a pre-tax number
Every break-even figure, here and everywhere else, is an operating figure struck before tax and before interest. Not one page we surveyed says so.
Two say the opposite. Wall Street Prep describes the result as having made "$0 in net profit". GoodCalculators labels a column computed as revenue minus costs "Net Profit". Both are operating profit. Only one page in the set, a bank calculator, labels its output "Operating Profit" honestly, and it never explains the distinction.
This matters more in India than in the US, for the reason below.
Where the Indian arithmetic genuinely differs
The GST composition scheme is the one place where break-even maths genuinely changes by country. Everything else marketed as an India feature in this field is decoration.
Section 10(4) of the CGST Act bars a composition dealer from collecting tax from the customer and from claiming input credit. That does two things at once. The levy, 1% for traders and manufacturers, 5% for restaurants and 6% for service providers, comes out of your own price rather than being added to the invoice, which shrinks contribution margin. And the GST you pay on purchases stops being recoverable, so it becomes a genuine unit cost. Both push break-even up.
On the figures here a trader moves from 220 units to 224, a restaurant to 240, a service provider to 244. Not one calculator in either teardown models it.
There is a second Indian point, and it is the reason the pre-tax caveat matters. Presumptive tax under section 58 of the Income-tax Act 2025 is charged on turnover, not profit, at 6% where receipts arrive by bank or online and 8% otherwise. A business sitting exactly at accounting break-even, earning nothing, is still deemed to have made 6 to 8% of turnover and is taxed on it. There is no zero-tax break-even under section 58. The escape is to claim lower actual profits, which pulls you into books and audit, itself a fixed cost.
What we deliberately did not build is the obvious thing. Entering costs net of GST is correct for a registered dealer, but that is how credit-invoice VAT works in dozens of countries, so it earns a field hint rather than a mode. Udyam and MSME thresholds start at ten crore of turnover, far beyond anyone reaching for this tool. And rupee symbols with lakh grouping is precisely what the competition means by Indian: one page defines its "Indian Format Support" feature as a JavaScript locale call, then prices a worked example in pounds.
Margin of safety
Margin of safety is how far sales can fall before you start losing money. Enter the units you expect to sell and the calculator shows it, in units and as a percentage.
It is arguably more useful than break-even itself, because break-even alone tells you nothing about how much room you have. Breaking even at 220 units means something very different if you expect 250 than if you expect 1,000.
Of the thirty-one pages we read, three named it and one computed it.
What this calculator does not do
It assumes one product at one price. A business selling several things at different margins needs a weighted average contribution margin, weighted by sales mix. Four pages describe that method correctly in prose and no tool in either teardown computes it, ours included.
It also assumes fixed costs stay flat as volume rises, which is not how they behave. Real fixed costs step: hiring a second person, taking a bigger unit, adding a delivery van. Two pages explain that properly and then divide by a single constant anyway. The honest workaround is to recompute after any change that adds a fixed cost, rather than trusting one answer across a range of volumes.
And it does not compute your tax. It flags where tax lands on turnover rather than profit, because that changes what break-even means, but the amount you owe depends on facts this page does not have. A chartered accountant in India or a CPA in the US is the right person for that.
Pair this with the guide
If you are pricing your own time rather than a product, the freelance rate calculator works the same problem from the other end. For a worked example of margins in a real business model, what dropshipping actually costs covers why thin contribution margins are so unforgiving.
Frequently asked questions
How do you calculate the break-even point?
Divide your fixed costs by the contribution margin, which is your selling price per unit minus what each unit costs you to make or deliver. That gives the number of units you must sell to cover everything. The formula is universal and every calculator uses it. What separates a useful answer from a misleading one is what you put into fixed costs, and in particular whether you include what you need to pay yourself.
Should my own salary be in fixed costs?
Yes, if you need the money to live on. Your drawings are a cost of running the business, not a share of its profit, and leaving them out produces a break-even point that is comfortably too low. On our India example, counting the owner's pay moves break-even from 120 units to 220. Of thirty-one calculators and articles surveyed in August 2026, not one had a field for it. Salaries in those tools always mean employees: one tool built for solo tradespeople even files labour under variable costs.
What is contribution margin?
Contribution margin is your selling price per unit minus the variable cost of that unit. It is what each sale contributes towards fixed costs before anything becomes profit. It is not gross margin, though several published calculators use the two interchangeably: one labels its field Margin and defines it in the tooltip as gross margin per unit. The contribution margin ratio is that figure divided by the selling price, expressed as a percentage.
Is the break-even point before or after tax?
Before. Break-even as every calculator computes it is an operating figure, struck before tax and before interest. No page we surveyed states this, and two get it backwards: one describes the result as zero net profit, another labels revenue minus costs as Net Profit. Both are operating profit. If you are taxed on turnover rather than profit, as under India's presumptive scheme, tax is owed even at break-even.
Does the GST composition scheme change my break-even point?
Yes, and it is the one place where the arithmetic genuinely differs by country. Section 10(4) of the CGST Act bars a composition dealer from collecting tax from the customer and from claiming input credit. So the levy of 1% to 6% comes out of your own price rather than being added to the invoice, which shrinks your contribution margin, and the GST you pay on purchases becomes a real cost rather than a recoverable credit. Both effects push break-even up. On our example a trader moves from 220 units to 224, a restaurant to 240 and a service provider to 244.
What is margin of safety?
Margin of safety is how far your sales can fall before you start losing money, expressed as units or as a percentage of expected sales. If you break even at 220 units and expect to sell 250, your margin of safety is 30 units, or 12%. It is the single most useful thing to know after break-even itself, and of thirty-one pages surveyed, three named it and one computed it.
What if my variable cost is higher than my price?
Then there is no break-even point at all, and no volume of sales will create one. Every unit sold adds to the loss. A well-built calculator says so; one widely used tool instead returns a negative break-even quantity and presents it as a valid answer, because its guard tests whether the contribution margin is non-zero rather than whether it is positive.
Sources
The Indian provisions were read from primary sources. The full record, including four items we could not verify, is kept in the repository as a working document.
- Central Board of Indirect Taxes and Customs, section 10 of the CGST Act 2017 for the composition scheme, including sub-section (4) barring both collection of tax from the recipient and input credit, and CGST Rule 7 for the rates
- Press Information Bureau, Ministry of Finance, for the notified composition turnover limits of Rs 1.5 crore for goods and Rs 50 lakh for services, and for the GST registration thresholds
- Income-tax Act 2025, section 58, Table serial number 1, for presumptive taxation of business at 6% of receipts through banking or online mode and 8% otherwise
- Observations about how other break-even calculators handle contribution margin, owner compensation, margin of safety and error states come from a live review of twenty-one US pages and ten India pages on 23 August 2026, reading served markup and calculator scripts rather than marketing copy