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Break-even point calculator

Calculate the units and turnover your UK business needs to break even, including VAT-exclusive pricing.

Résultat
400 unités
Quantité à vendre pour atteindre le point mort
20 000 €
Chiffre d'affaires au seuil de rentabilité
Marge sur coût variable par unité : 30 € (60.0 %)

À propos de cet outil

Why use this tool

The break-even point calculator tells you how many units your UK business must sell before it stops making a loss. It's a core figure in any business plan submitted to a bank, a Start Up Loans application or an investor pitch deck, and it's the quickest way to sense-check pricing for a limited company or sole trader operation. Whether you run an Etsy shop, a café, a trades business or a freelance practice, this number turns a vague hope into a monthly sales target.

How it works

The calculation uses three figures: fixed costs for the period (rent, business rates, insurance, software, salaried staff), your selling price per unit and your variable cost per unit (materials, packaging, delivery, card fees). Price minus variable cost is the contribution margin. Fixed costs divided by that margin gives break-even volume, and multiplying by price gives break-even turnover. Enter prices excluding VAT: VAT you charge is collected on behalf of HMRC and is not turnover you keep.

Real example

A Manchester candle maker has £12,000 of annual fixed costs (studio, insurance, website, marketing). Each candle sells for £50 excluding VAT and costs £20 in wax, glassware and postage, giving a £30 contribution margin (60%). Break-even is £12,000 ÷ £30 = 400 candles per year — about 34 a month, or £20,000 of turnover. Every candle sold beyond that adds £30 to profit before tax.

Practical tips

Keep an eye on the VAT registration threshold: once your taxable turnover passes it, you must register with HMRC and either raise prices or absorb 20% VAT, which changes your break-even overnight. Recalculate after a rent review, a supplier price rise or a new hire. Remember that a 10% price increase lifts margin far more than a 10% cut in materials cost. Royal Mail and courier surcharges, Stripe or PayPal fees and marketplace commissions are variable costs that quietly reduce margin — include them. Finally, compare your break-even volume with realistic demand in your area and your production capacity before committing to fixed overheads such as a lease.

Disclaimer

This calculator provides a simplified estimate based on one product or an average basket. Multi-product businesses should use a weighted average margin. Corporation Tax, dividends, director salary, loan repayments and seasonality are not included. This tool has no accounting or contractual value and does not replace advice from a qualified accountant.

Frequently asked questions

What exactly is the break-even point?
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The break-even point is the level of sales at which turnover exactly covers all fixed and variable costs, leaving zero profit and zero loss. Beyond that point, each additional sale adds profit equal to its contribution margin. It's a figure lenders and Start Up Loans assessors look for in a business plan because it shows you understand the economics of your own model.
What counts as a fixed cost for a UK business?
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Fixed costs are those that don't move with sales volume: rent, business rates, public liability insurance, accountancy fees, software subscriptions, and salaried staff including employer National Insurance. Variable costs move with each unit sold: materials, packaging, Royal Mail or courier postage, card processing and marketplace commission.
Should prices include VAT in this calculation?
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No — always use VAT-exclusive prices. VAT you charge is collected for HMRC and passed on, so it's not turnover you keep. If you're not VAT-registered, your selling price is your net price. Bear in mind that crossing the VAT registration threshold effectively cuts your margin unless you raise prices, which pushes your break-even point up.
How do I reduce my break-even point?
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Raise your price, lower the variable cost per unit, or cut fixed overheads. Price is the most effective lever because it improves margin on every single sale with no change to operations. Renegotiating supplier terms, switching courier, or reducing packaging weight all help. On fixed costs, review your lease, insurance and unused subscriptions annually.
Does this work for services and freelancers?
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Yes. Treat a billable day, an hour or a monthly retainer as your unit. The selling price is your day rate and the variable cost covers travel, subcontractors and any licences you rebill. The result shows how many billable days per month you need to cover your overheads — useful when setting a day rate or deciding whether to take on an office.