Every business has two kinds of costs: costs that change with how much you produce, and costs that are there whether you sell a single unit or a thousand. The second group is your fixed cost — the rent, insurance, software subscriptions and other recurring bills you owe every month regardless of sales volume. Knowing your total fixed cost is the starting point for pricing, budgeting and answering the one question every owner asks: "How much do I need to sell just to break even?"
This fixed cost calculator adds up your recurring monthly expenses and converts them into an annual figure. Then, by plugging in your selling price and the variable cost to make one unit, it computes your contribution margin and the exact number of units you must sell each month before you start making a profit. Adjust any field and every figure updates instantly.
How to Use
- Enter your Monthly Rent — the lease or mortgage payment for your workspace. This is usually the largest single fixed line.
- Add your Utilities — electricity, water, gas, internet and phone. If these swing wildly by season, enter an average month.
- Type your Insurance Premium — commercial liability, property or vehicle coverage, shown as a monthly amount. If you pay annually, divide by twelve.
- Fill in Software & Subscriptions — SaaS tools, licenses and recurring service plans. These small "set and forget" charges often quietly add up to hundreds of dollars per month.
- Put any remaining recurring expenses in Other Fixed Costs — retainers, loan repayments, or contracts that do not scale with sales.
- (Optional) Enter your Selling Price per Unit and Variable Cost per Unit to see the break-even point. Variable cost is the direct cost of materials, labor and packaging for one item.
The result card shows your Total Fixed Cost per Month, the annualized Total Fixed Cost per Year, your Contribution Margin per Unit, the Break-Even Units per Month you must sell, and the Break-Even Revenue that represents.
The Fixed Cost and Break-Even Formulas
Total fixed cost is the simple sum of all period expenses that do not vary with output:
Total Fixed Cost = Rent + Utilities + Insurance + Subscriptions + Other Fixed Costs
Annualizing it is just twelve times the monthly total. The more interesting number is the break-even point, which comes from the contribution margin — what you keep from each sale after paying the direct cost of making it:
Contribution Margin per Unit = Price per Unit − Variable Cost per Unit
Break-Even Units = Total Fixed Cost ÷ Contribution Margin per Unit
Break-Even Revenue = Break-Even Units × Price per Unit
Worked example: with rent of $2,000, utilities of $300, insurance of $150 and subscriptions of $100, the total fixed cost is $2,550 per month, or $30,600 per year. If you sell each unit for $50 and it costs $20 to make, your contribution margin is $30 per unit. Dividing $2,550 by $30 gives 85 units per month — you must sell 85 items before you cover fixed costs, and every unit after that contributes pure profit. At $50 each, that is $4,250 of monthly revenue to break even.
If the contribution margin is zero or negative — meaning your price equals or is below your variable cost — no volume of sales can ever cover fixed costs, and the calculator flags that break-even is unreachable. Raising price or cutting variable cost becomes the only path forward.
Examples
Example 1 — The default small shop. A bakery has $2,000 rent, $300 utilities, $150 insurance and $100 in software subscriptions. Its fixed cost is $2,550 a month ($30,600 a year). Selling a loaf for $5 when ingredients and labor cost $2 leaves a $3 contribution margin. Dividing $2,550 by $3 means the shop must sell 850 loaves a month just to break even.
Example 2 — Adding hidden subscriptions. A freelance designer pays $3,500 rent for a shared studio, $450 utilities, $250 insurance, and $200 in software, plus $600 for a part-time retainer. Total fixed cost is $5,000 a month ($60,000 a year). If a project is billed at $75 and the direct cost of delivery is $30, the margin is $45, so break-even is about 111 units per month, or roughly $8,333 in monthly revenue.
Example 3 — A high-volume operation. A manufacturer leases a large facility for $1,000,000 a month and carries another $80,000 in fixed costs, for a total of $1,080,000 a month ($12,960,000 a year). Selling each unit at $100 against a $40 variable cost yields a $60 margin. The break-even point is 18,000 units a month, equal to $1,800,000 in monthly revenue. The calculator easily handles figures in the millions without any overflow or rounding issues.
Example 4 — No fixed costs yet. A bootstrapper working from home enters zeros across the board. With a $20 price and $10 variable cost, the contribution margin is $10, but because fixed cost is $0, the break-even point is 0 units — every sale from the very first one is profit. This is why startups can be cash-flow positive almost immediately, but it also shows how quickly a single lease can change the math.
FAQ
What counts as a fixed cost?
Fixed costs are recurring expenses that stay roughly the same month to month regardless of how much you produce or sell. Common examples are rent or mortgage, insurance premiums, software subscriptions, retainer fees, loan repayments, and salaried overhead. By contrast, materials, packaging, hourly production labor and payment processing fees are variable because they rise directly with each unit you make.
How do I calculate total fixed cost?
Add together every monthly expense that does not change with sales volume. In this calculator, enter rent, utilities, insurance, subscriptions and any other fixed line; the tool sums them into a monthly total and multiplies by twelve for the annual figure. For the default inputs — $2,000 rent, $300 utilities, $150 insurance and $100 subscriptions — the result is $2,550 per month, or $30,600 per year.
What is the difference between fixed and variable costs?
Fixed costs exist even when you produce nothing; variable costs apply only when you make or sell a unit. A lease payment of $2,000 is due whether you sell zero items or a thousand, but the raw materials for one item are spent only when that item is produced. Separating the two is essential because break-even analysis depends entirely on how much each sale contributes toward covering the fixed base.
How do I find my break-even point?
First compute your contribution margin per unit: selling price minus variable cost per unit. Then divide your total monthly fixed cost by that margin. The result is the number of units you must sell each month before profit begins. For example, $2,550 of fixed cost divided by a $30 contribution margin equals 85 units per month. Multiply by the selling price to get break-even revenue.
What if my break-even point is unreachable?
If your price equals or is below your variable cost, the contribution margin is zero or negative, and selling more units will never cover fixed costs. In that situation you must either raise your selling price, negotiate lower materials or labor costs, or reduce your fixed overhead. The calculator flags this case rather than returning a misleading number.
Should I enter annual costs as monthly amounts?
Yes. This calculator works in monthly units, so divide any annual bill — such as an annual insurance premium or yearly software plan — by twelve before entering it. This keeps your total fixed cost consistent with the monthly break-even calculation. If you prefer to plan annually, compare the annual fixed total against your expected annual sales to project a yearly break-even revenue.
Disclaimer
This fixed cost calculator is provided for informational purposes only and does not constitute financial, accounting, or legal advice. Results are estimates based on the inputs you enter and the standard cost-accounting break-even formula; actual fixed and variable costs vary by business, industry and location. Always confirm your figures with a qualified accountant or financial professional before making pricing or investment decisions.