Free break-even calculator

Know exactly how much you need to earn. Before you can think about profit, you need to cover your costs. This calculator shows your break-even point, the minimum revenue required to pay all expenses and stay in business.

Enter your fixed costs and variable costs. See how many clients, projects, or billable hours you need to break even. Use this to set revenue targets, evaluate pricing changes, or understand your financial floor.

Knowing your break-even point transforms pricing from guesswork into math.

Calculate Your Break-Even Point

Enter your costs to see the minimum revenue needed

Monthly Fixed Costs ($)

Variable Cost (% of revenue)

Average Project Value ($)

Your Hourly Rate ($)

Track Revenue in Plutio

The break-even formula explained

Break-even analysis determines when total revenue equals total costs, meaning you are neither making nor losing money.

The formula

Break-even Revenue = Fixed Costs ÷ (1 - Variable Cost Ratio)

Or in units:

Break-even Units = Fixed Costs ÷ (Price per Unit - Variable Cost per Unit)

Understanding the components

Fixed costs: Expenses that do not change with revenue. Rent, insurance, software subscriptions, loan payments. You pay these whether you work 10 hours or 100.
Variable costs: Expenses that scale with revenue. Subcontractor fees, materials, transaction fees, commissions. More work means more variable costs.
Contribution margin: Revenue minus variable costs. This is what remains to cover fixed costs and generate profit.

Example calculation

Fixed costs: $3,000/month (software, insurance, etc.)

Variable costs: 20% of revenue (transaction fees, expenses)

Break-even = $3,000 ÷ (1 - 0.20) = $3,000 ÷ 0.80 = $3,750/month

At an average project value of $1,500, you need 2.5 projects per month just to break even.

Fixed vs variable costs for freelancers

Correctly categorizing costs is essential for accurate break-even analysis.

Common fixed costs

Cost	Typical range
Software subscriptions	$100-500/month
Health insurance	$300-700/month
Liability insurance	$50-150/month
Coworking/office	$0-500/month
Phone/internet	$100-200/month
Accounting software	$20-50/month
Professional dues	$20-100/month

Common variable costs

Cost	Typical percentage
Payment processing fees	2.5-3% of revenue
Subcontractors	20-50% of project revenue
Project-specific expenses	5-15% of project revenue
Platform fees (Upwork, etc.)	5-20% of revenue

Many freelancers with no employees and minimal expenses have variable costs under 10% of revenue, making their break-even calculation primarily about covering fixed costs.

Using break-even analysis for business decisions

Break-even is not just a number to calculate once. It is a tool for ongoing decision-making.

Setting revenue targets

Your break-even point is your floor, not your goal. Add your target profit (and salary, if not included in fixed costs) to determine your actual revenue target:

Revenue Target = Break-even + Profit Goal + (Salary if not in fixed costs)

Evaluating pricing changes

If you raise prices by 20%, how does your break-even change? With higher prices, you need fewer clients to reach the same revenue. Calculate the new break-even and compare.

Assessing new expenses

Before subscribing to new software or hiring help, calculate the impact on break-even. A $200/month tool increases your break-even by $200 ÷ contribution margin. Is the productivity gain worth it?

Seasonal planning

If some months are slow, save enough during busy months to cover fixed costs. Your break-even tells you the minimum cash reserve needed for a zero-revenue month.

Deciding when to quit your job

Before going full-time freelance, calculate your break-even. Can you reliably earn that much? Have you hit it for 3-6 consecutive months while still employed? That is when it is safe to leap.

Frequently asked questions

What is a break-even point?

The break-even point is the revenue level where your total income equals your total expenses. You are not making profit, but you are not losing money either. Anything above break-even is profit. Anything below is a loss.

How do I calculate break-even for a service business?

Add up your monthly fixed costs (rent, software, insurance). Determine your variable cost percentage (typically payment fees, subcontractors). Break-even = Fixed Costs ÷ (1 - Variable Cost %). For a freelancer with $2,000 fixed costs and 10% variable costs: $2,000 ÷ 0.90 = $2,222/month to break even.

Should I include my salary in fixed costs?

If you pay yourself a regular salary, yes. If your 'salary' is whatever is left after expenses (common for solo freelancers), no. In that case, break-even means you cover business expenses but have not paid yourself. Add your target salary to the break-even number to get your true minimum.

What if my variable costs are near zero?

Many solo freelancers have minimal variable costs (just payment processing fees of 2-3%). In this case, break-even is almost exactly your fixed costs. Every dollar of revenue above that goes to paying yourself or to profit.

How many clients do I need to break even?

Divide your break-even revenue by your average revenue per client. If break-even is $4,000/month and your average project is $2,000, you need 2 clients per month. If your average is $500, you need 8. This is the minimum, not a comfortable target.

How do I lower my break-even point?

Two ways: reduce fixed costs or increase contribution margin (revenue minus variable costs). Audit subscriptions for services you do not use. Negotiate better payment processing rates. Reduce reliance on platforms that take large cuts. Every dollar saved in costs is a dollar less you need to earn.

Why is break-even important for pricing?

Break-even tells you the minimum you must charge to stay in business. If you cannot find clients at prices above break-even, you are running a charity. Use break-even to set price floors, evaluate discounts (can you afford them?), and negotiate from a position of knowledge rather than fear.

How often should I recalculate break-even?

Recalculate whenever your costs change significantly: new software, new insurance, ending a subscription, changing your rate. At minimum, review annually. As costs creep up, break-even rises silently. Without recalculating, you might be earning less than you think.

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