Business & dates New Zealand
Break Even Calculator New Zealand
The break-even point is the number of sales at which you stop losing money. This calculator takes your fixed costs, your price and the variable cost of each sale, and shows the units and revenue you need to break even or to hit a profit target.
Free, no signup Runs in your browser
Rent, wages, insurance and other costs that do not change with sales.
Materials, packaging, delivery and fees on each sale.
Units to break even
—Revenue to break even
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Contribution per unit
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Contribution margin
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Margin of safety
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Units for your profit target
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The working
General information only. General information and estimates only, not financial, tax or legal advice. Rates, thresholds and rules change, so check with the Inland Revenue or a registered tax adviser before you act.
How do I calculate my break-even point?
Divide fixed costs by the contribution per unit, which is price less variable cost. With $60,000 of fixed costs and $80 price against $35 variable cost, each sale contributes $45, so you break even at 1,334 units. To also earn $15,000 of profit, you need 1,667 units.
Fixed and variable costs
Fixed costs stay the same however much you sell: rent, insurance, salaries and software subscriptions. Variable costs rise with each sale: materials, packaging, delivery, payment fees and sales commissions. Sorting each cost into one group or the other is the main work of a break-even analysis.
Some costs are in between, such as a phone plan with usage charges. Put the fixed part in fixed and the per-use part in variable.
Using the result
Break-even tells you whether a plan is realistic: if you need to sell more than the market can take, change the price, the costs or the plan. It is also useful for pricing a new product, deciding whether to hire and testing how much a discount would hurt. Business income is taxed at your marginal rate, and self-employed people pay ACC levies instead of having an employer pay them.
To see the profit side, use the gross profit calculator.
How this is calculated
The rule, step by step, so you can check any figure by hand.
contribution per unit = price − variable cost per unitbreak-even units = fixed costs ÷ contribution per unit (rounded up)break-even revenue = break-even units × priceunits for a profit target = (fixed costs + target) ÷ contribution per unitmargin of safety = (expected units − break-even units) ÷ expected units
Break-even assumes a steady price and a steady cost per unit, and that fixed costs stay fixed across the range you are looking at. In reality a big jump in sales may need another staff member or more space, which raises fixed costs in steps.
Keep the price and costs excluding GST, because GST passes through your business to the tax office. The margin of safety shows how far sales can fall before you start losing money, and a small figure means a thin buffer.
A worked example
Fixed costs of $60,000 a year, a $80 price and $35 of variable cost per unit, expecting 2,000 sales.
- Contribution per unit$45
- Break-even units1,334
- Break-even revenue$106,720
- Margin of safety33%
- Units for $15,000 profit1,667
1,334 units to break even.
Raising the price by $5 would cut the break-even point to 1,200 units.
Ways to lower it
Raise the price, reduce variable costs, cut fixed costs or change the product mix towards higher-margin items. Even small changes to price move the break-even point a lot, because they raise the contribution on every sale.
What it leaves out
Tax, seasonal swings, discounts and the cost of stock held are not modelled. For a business with several products, use the average price and cost per unit.
What this calculator does not do
- One product or an average
- Costs assumed constant
- Figures excluding GST
- General information, not advice
Common questions
What is a break-even point?
The sales at which total revenue equals total costs.
What is contribution margin?
The price less the variable cost, which is the amount each sale adds towards fixed costs.
What is margin of safety?
How far sales can fall below expectations before you make a loss.
Should prices include GST?
No. Use prices and costs excluding GST.
Can I use it with several products?
Use the average price and variable cost per unit across your mix.
Where these numbers come from
- business.govt.nz — running a business Government guidance on pricing, costs and starting out
Method last reviewed 2026-10-28 This calculator uses fixed rules rather than rates that change, and its method is re-checked against the sources above at least once a year. Out of date? Tell us and we will fix it.
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