Useful next calculations
Rates and sources
UK company rates (Corporation Tax, VAT, payroll NI) as published by HMRC and Companies House.
Source: HMRC — Running a business. Check the linked guidance and any live quote before acting.
When to use this calculator
- Before pricing a job, setting margin targets or reviewing hiring costs.
- When you want to test sensitivity around volume, tax, markup or overheads.
- When you need a practical estimate before committing to a budget or proposal.
- When you are modelling break-even volume as costs or prices change.
A worked example
These are the example figures the calculator opens with.
| Input | Value |
|---|---|
| Fixed Costs (£) | £10,000 |
| Selling Price per Unit (£) | £50 |
| Variable Cost per Unit (£) | £20 |
For those figures the calculator returns:
- Break-even units: 334.00
- Revenue needed: £16,700.00
- Contribution margin: £30.00
Method & assumptions
The break-even point in units is calculated as: Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit). The denominator — selling price minus variable cost — is known as the contribution margin per unit. To find break-even in revenue terms rather than units, divide total fixed costs by the contribution margin ratio (contribution margin per unit divided by selling price).
Enter all figures excluding VAT if your business is VAT-registered, as VAT is not part of your underlying economics. This calculator assumes a single product or a consistent product mix and does not account for step-fixed costs (where fixed costs jump at certain output levels). It is intended as a planning aid; for statutory financial reporting, use formal management accounts prepared with your accountant's guidance.
Common mistakes
- Using optimistic assumptions without testing a more cautious scenario.
- Using revenue in place of gross profit when calculating margin.
- Treating the result as a final quote instead of a planning estimate.
- Forgetting employer on-costs when modelling the true cost of a hire.
What to do next
- Try at least one more scenario so you can compare a realistic range.
- Use the related calculators below to cross-check the decision from another angle.
- Write down the key outputs from your best scenarios before you decide.
- If the result surprises you, change one input at a time to isolate the driver.