Break-Even Calculator
See how many jobs you need to complete and how much revenue you need to cover your costs.
Revenue and Costs
Total for one planning period, such as a month.
Costs that rise with each job you complete.
Results
Whole jobs required
6 jobs
Revenue at whole jobs
$9,000
Theoretical break-even jobs
6 jobs
Theoretical break-even revenue
$9,000
Contribution per job
$1,000
Contribution margin ratio
66.67%
Assumes the same revenue and variable cost per job. Use the same GST basis for all amounts.
Fixed Costs, Variable Costs and Contribution
Fixed costs stay the same across the job volumes you’re planning for. For a monthly estimate, add costs such as rent and base salaries that stay the same that month. A processing fee you pay on each completed job belongs in variable cost per job. A flat monthly processing fee belongs in fixed costs.
Subtract the variable cost per job from its revenue to find the contribution per job. That amount goes towards fixed costs. The contribution margin ratio is that amount divided by revenue per job. Use the same goods and services tax (GST) basis for every amount you enter.
Calculate the Break-Even Point
When each job earns a positive contribution, divide your fixed costs by the contribution per job to get the exact break-even number of jobs. Round that number up to get the whole jobs required. If it takes 6.5 jobs on paper, plan for seven completed jobs.
Divide fixed costs by the contribution margin ratio to find theoretical break-even revenue. Use the ratio as a decimal in that formula. Revenue at whole jobs multiplies the whole jobs required by revenue per job. At $1,500 per job, 6.5 jobs gives $9,750 in theoretical revenue and seven jobs gives $10,500.
The calculator works out the whole-job target and both revenue figures before rounding the numbers it displays. Business Queensland’s break-even guidance explains how the revenue threshold relates to fixed costs.
A Brokerage Cost-Coverage Example
In the fictional example, a brokerage has $6,000 in monthly fixed costs and earns $1,500 per job. Each job costs $500 to process, leaving $1,000 in contribution per job and a contribution margin ratio of 66.67%. Six jobs bring in $9,000 and leave exactly $6,000 after variable costs.
The bank balance can tell a different story. A commission can arrive after the bills fall due, or a clawback can reduce the cash you have to pay them. A month with more small jobs than usual can also fall short of the revenue target even if you complete six jobs.
When There Is No Finite Break-Even Point
If revenue per job is no higher than the variable cost per job, completing more jobs can’t cover any fixed costs. At zero contribution, each job covers only its own variable cost. With negative contribution, each additional job increases the loss. At zero revenue per job, the contribution margin ratio is undefined.
With zero fixed costs, zero jobs and $0 revenue cover the cost of doing no work. If contribution is negative, completing any jobs creates a loss. If contribution is zero, every job covers its own costs.
Check the job target against your capacity for the period. If reaching that target means hiring another salaried processor, recalculate using the higher fixed cost and the job volume the new staffing can handle.
