New Zealand calculator
Break-Even Calculator NZ for Business
Work out how many units or sales a business needs to cover fixed costs using selling price and variable cost, then calculate the sales needed for a target profit.
Last reviewed by NZ Calculator:
What is the break-even point?
The break-even point is where modelled total revenue equals total costs. In unit terms, divide fixed costs by the contribution earned on each unit sold.
Your business numbers
Your break-even estimate
Break-even formula
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit)
The amount in brackets is contribution per unit: the amount each sale contributes toward fixed costs and then profit. Once cumulative contribution covers fixed costs, the simplified model reaches break even.
Break-even analysis example
If fixed costs are $10,000, selling price is $100 and variable cost is $40, contribution is $60 per unit. The mathematical break-even point is 166.67 units, so a business selling whole units would need 167 sales to exceed break even.
NZ source: Business.govt.nz — how to set the right price.
Frequently asked questions
How is break-even point calculated?
Break-even units equal fixed costs divided by contribution per unit. Contribution per unit equals selling price minus variable cost per unit.
What is break-even point in business?
It is the sales level where total revenue equals total costs, so the calculated operating profit is zero before considering items outside the model.
Why is break-even analysis useful?
It connects price, variable cost and fixed cost so a business can see how many units or how much revenue may be needed before the activity covers its modelled costs.
What if variable cost is higher than selling price?
There is no positive contribution margin, so selling more units does not cover fixed costs. The price or variable-cost structure needs to change for the simple break-even formula to produce a meaningful result.
Can I calculate a target profit as well as break even?
Yes. Target-profit units equal fixed costs plus the target profit, divided by contribution per unit.
Does break-even include GST?
Use consistent inputs. If your selling price is GST-exclusive, enter GST-exclusive variable and fixed costs where appropriate. This calculator does not add or remove GST automatically.
Can service businesses use a break-even calculator?
Yes, if you can define a billable unit or average sale and the variable cost attached to it. For hourly contracting, a contractor-rate calculator may be more direct.
Is break-even the same as cash flow?
No. Break-even is a profitability relationship between revenue and costs. Cash timing, loan repayments, tax and working capital can create cash-flow pressure even when a business is profitable.