Break-Even Calculator Australia 2025-26
Find out how many sales you need to cover your costs.
Calculate Australian break-even point with AUD prices, GST-aware cost assumptions, fixed costs, variable costs, margin, and units needed to cover costs.
Australia Break-Even Notes
Australian break-even planning usually separates GST-inclusive selling prices from true revenue, then checks rent, wages, subscriptions, stock, freight, and payment fees.
Use this view to test how many sales are needed before a side hustle, shop, consulting offer, or online product starts covering its fixed monthly costs.
Australian version note: this break even keeps the calculation anchored to AUD amounts, local product names, Australian tax language, and the way banks, employers, agencies, or advisers usually describe the inputs.
Local cues stay visible where they matter: ATO, PAYG, superannuation, Medicare levy, stamp duty, kilometres, comparison rate, APRA, Centrelink, GST, and Australian-dollar results are not rewritten into overseas vocabulary.
Use the output as an Australian estimate first, then sanity-check it against local quotes, lender criteria, government thresholds, state rules, or professional advice before relying on the number.
Break-even = Fixed costs ÷ (Price − Variable cost per unit). Enter your figures below.
Select the question that matches where you are right now.
Use this calculator to plan and model your financial situation.
Compare scenarios by adjusting inputs. Use the precision bar to reveal more detail. Results update in real time as you type.
Not professional financial advice, not a guarantee of any specific outcome, and not a substitute for qualified advice for significant decisions.
All calculations run entirely in your browser using standard formulas. No data is sent to any server.
The inputs that most influence this result are shown in the breakdown above. Even small changes to key variables can have a significant compound effect over time.
Longer periods amplify both growth and cost. Starting one year earlier or later can change a financial outcome by more than you expect.
Even a 1% change in rate can materially change the outcome over a long period. Use Standard or Advanced mode to model rate sensitivity.
Most financial variables have a non-linear relationship with the result — they compound. The sensitivity table in Advanced mode shows this clearly.
To improve this result, focus on the inputs with the highest leverage. Small changes to the right variable often produce much larger outcomes than large changes to less important ones.
Adjust inputs one at a time. The one that moves the result most is your binding constraint — focus effort there first.
Use the Scenario A/B feature in Advanced mode to compare two situations side by side.
Many financial decisions benefit from timing. Starting earlier, fixing a rate at the right moment, or clearing a debt before applying for new credit can each produce significant improvements.
Depending on what you are planning, these are the natural next steps after reviewing this result.
This calculator shows one part of a financial decision. The related calculators below help you model adjacent factors.
Switch to Standard or Advanced mode and use the scenario comparison tool to model best, expected, and worst case.
For decisions involving significant amounts of money, use this result as a starting point for a conversation with a qualified financial advisor.
How the Break-Even Calculator works
The break-even formula
Break-even point (units) = Fixed Costs ÷ (Selling Price − Variable Cost per unit). The denominator is your contribution margin — the amount each sale contributes toward covering fixed costs. Once total sales cover all fixed costs, every additional sale is pure profit.
Fixed vs variable costs
Fixed costs do not change with output: rent, insurance, salaries, loan repayments, software subscriptions. Variable costs change with each unit: raw materials, packaging, shipping, payment processing fees, sales commission.
| Fixed costs | Selling price | Variable cost/unit | Break-even units | Break-even revenue |
|---|---|---|---|---|
| $5,000 | $50 | $20 | 167 | $8,350 |
| $10,000 | $100 | $40 | 167 | $16,700 |
| $20,000 | $200 | $80 | 167 | $33,400 |
| $50,000 | $150 | $60 | 556 | $83,400 |
| $100,000 | $500 | $200 | 334 | $167,000 |
Break-even examples by business type — 2025
These figures are illustrative planning ranges. Actual costs depend heavily on location, scale, and business model.
| Business type | Typical monthly fixed costs | Break-even monthly revenue |
|---|---|---|
| Café / coffee shop | $15,000–$25,000 | $40,000–$70,000 |
| E-commerce (product-based) | $3,000–$8,000 | $8,000–$25,000 |
| SaaS subscription app | $10,000–$30,000 | $15,000–$50,000 |
| Retail store | $12,000–$20,000 | $35,000–$60,000 |
| Freelance consultant | $2,000–$5,000 | $4,000–$10,000 |
| Trade business (plumber/electrician) | $8,000–$15,000 | $20,000–$40,000 |
Contribution margin — the key to break-even analysis
Contribution margin per unit
Contribution margin = Selling price − Variable cost. This is what each sale 'contributes' toward covering your fixed costs. Once your total contribution margin equals your fixed costs, you have broken even.
Contribution margin ratio
Contribution margin ratio = Contribution margin ÷ Selling price × 100. A 40% contribution margin ratio means 40 cents of every dollar of revenue goes toward covering fixed costs and eventually profit. This ratio is more useful than the raw per-unit figure when comparing products with different price points.
| Selling price | Variable cost | Contribution margin | CM ratio |
|---|---|---|---|
| $100 | $40 | $60 | 60% |
| $50 | $30 | $20 | 40% |
| $200 | $150 | $50 | 25% |
| $500 | $200 | $300 | 60% |
Margin of safety — how far above break-even are you?
What is margin of safety?
The margin of safety measures how much sales can fall before you reach break-even. It is the difference between your current sales and the break-even sales level.
Formula
Margin of Safety = (Current Sales − Break-Even Sales) ÷ Current Sales × 100. If you currently sell 500 units/month and break-even is 300 units, your margin of safety is (500−300)÷500 = 40%. This means sales can fall by 40% before you make a loss.
Healthy margins of safety by business type
High-fixed-cost businesses (manufacturing, hospitality) generally need higher margins of safety (30%+) because their losses escalate quickly below break-even. Low-fixed-cost businesses (consulting, software) can operate with lower margins.
How pricing decisions affect your break-even point
The pricing paradox
Raising prices reduces the number of units needed to break even — but may reduce total sales. Lowering prices requires more units to be sold, but may increase total revenue if demand is elastic. The break-even calculation helps you model both scenarios.
Example: price increase impact
A business with $10,000 fixed costs, $30 variable cost, selling at $50 (contribution margin $20): break-even = 500 units. Raise price to $60 (contribution margin $30): break-even drops to 334 units. A 20% price rise produces a 33% reduction in break-even units — a powerful leverage effect.
Minimum viable price
Your minimum viable price is your variable cost per unit. Selling below variable cost is always loss-making regardless of volume — you lose more with every unit sold. Many start-up businesses make this error when offering excessive discounts.
❓ Frequently asked Frequently asked questions
What is the break-even point?
The break-even point is the level of sales at which total revenue equals total costs — you make neither profit nor loss. Below this point you make a loss; above it you make a profit. It can be expressed in units (number of items sold) or revenue (total dollar value of sales).
What are fixed vs variable costs?
Fixed costs do not change with output: rent, salaries, insurance, loan repayments, software subscriptions. Variable costs change with each unit sold: materials, packaging, shipping, sales commissions. The break-even formula divides fixed costs by the contribution per unit (price minus variable cost).
How does the contribution margin differ from gross margin?
Contribution margin = revenue minus variable costs. Gross margin = revenue minus cost of goods sold (COGS). COGS typically includes both direct materials and direct labour. For most business analyses they are similar, but the distinction matters when some labour costs are fixed (e.g., salaried production staff) vs variable (e.g., casual labour paid per unit).
Does break-even analysis account for tax?
No — standard break-even analysis uses pre-tax figures. The break-even point represents the revenue needed to cover all operating costs before income tax. A 'post-tax break-even' would require a higher revenue level, as some portion of each dollar of profit is paid to the ATO.
Can I use break-even analysis for a service business?
Yes — for service businesses, 'units' can be hours billed, client engagements, or service packages. Fixed costs are your overhead (office, software, insurance, base salaries); variable costs are directly attributable to each service delivery (materials, contractor fees, travel).
Where these figures come from
Business figures on this page are drawn from the Australian Taxation Office (business tax, GST, PAYG), Business.gov.au (the federal business registration hub), Fair Work (employer obligations), and ASIC (company and director rules).
- Company tax rate (25% / 30%) — ATO — Company tax rates.
- GST rules (10%) — ATO — GST.
- PAYG withholding & employer obligations — ATO — PAYG withholding.
- Business registration (ABN/ACN) — Business.gov.au.
- Employer pay & award obligations — Fair Work Ombudsman.
- Company & director rules — ASIC — Companies.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.