Everhour connects cost and billable rates to project work, while break-even math shows where profit starts.
Estimate total cost by combining labor hours, materials, and overhead. Know your numbers before you send the proposal.
Indirect costs on top of labor + materials
The calculator gives you the number — Everhour takes it from there.
One click and you're timing. Start a timer, add an entry, edit the details. This is exactly how it feels in Everhour.
Set a budget, assign rates, and get alerted before you're over.
Measurement
Track your budget through time or costs
Every report you need — configured your way, always up to date.
Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.
A break-even point shows the sales volume where contribution from sales equals fixed costs. At that point, modeled profit is $0 before income tax, owner draws, financing effects, and other items outside the model. The calculation answers a direct operating question: how many units, billable packages, or service engagements must you sell before the work stops losing money.
The key input is contribution margin, not gross profit. Contribution margin subtracts variable cost from the selling price for one unit. Fixed costs then sit outside each unit and must be covered by total contribution. A U.S. product business may still calculate gross profit as net receipts minus COGS for tax or reporting purposes, but break-even analysis needs the separate fixed-versus-variable cost split.
Use this formula for unit volume: fixed costs divided by sales price per unit minus variable cost per unit. The denominator is contribution margin per unit. For example, fixed costs of $15,000, a sales price of $95 per unit, and variable cost of $35 per unit create a $60 contribution margin. The break-even point is $15,000 divided by $60, which equals 250 units.
The same example also checks in dollars. Selling 250 units at $95 produces $23,750 in revenue. Variable cost equals 250 units times $35, or $8,750. Revenue minus variable cost leaves $15,000 of contribution, which exactly covers the $15,000 fixed cost. Sales above 250 units add $60 of contribution before other modeled effects.
Fixed costs stay in the model even if you sell one fewer unit. Examples include a monthly software subscription, a facility lease, a base contractor retainer, or minimum equipment rental. Variable costs move with each unit sold, such as packaging, direct materials, per-unit merchant fees, or subcontractor cost tied to each deliverable.
COGS and variable cost do not mean the same thing. For U.S. small-business tax reporting, gross profit is net receipts after returns and allowances minus COGS, and Form 1125-A line 8 carries COGS to the income tax return when inventory is involved. Break-even analysis sorts costs by behavior instead: fixed or variable. A cost can belong in COGS and still need careful classification for break-even modeling.
A one-off break-even calculation is enough when you are testing a single price, launch quantity, or project estimate. You need the fixed cost, expected selling price, and variable cost per unit. That gives you a clean minimum sales target before you spend time building a full forecast or revising a proposal.
A managed workflow matters once rates, project scope, and delivery costs change over time. Everhour separates internal cost rates from client-facing billable rates, supports per-person defaults and per-project overrides, and preserves dated rate history. That makes break-even reviews stronger for service work because labor cost, billable pricing, and project-specific rate changes stay tied to tracked work instead of scattered across manual notes.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
High Performer
G2
Summer 2026
Best Ease Of Use
Capterra
Summer 2026
Rated in the top time trackers across G2, Capterra, and TrustRadius — with consistent praise for ease of use, integrations, and support.
Divide fixed costs by contribution margin per unit. Contribution margin per unit equals selling price per unit minus variable cost per unit. If fixed costs are $15,000 and each unit contributes $60 after variable cost, the break-even volume is 250 units. Round up when the result is a partial unit, since selling part of a unit rarely covers the model in practice.
Multiply break-even units by the selling price per unit, or divide fixed costs by the contribution margin ratio. The contribution margin ratio equals contribution margin per unit divided by selling price per unit. Use net selling price for the model, and handle state or local sales tax separately when the tax is collected from the buyer and remitted to the government.
Contribution margin focuses on cost behavior. It subtracts variable cost from each sale, then uses the result to cover fixed costs. Gross profit follows the income-statement or tax-reporting chain, such as net receipts minus COGS for U.S. small-business reporting. A break-even model needs the fixed-versus-variable split because sales volume changes variable cost but does not automatically change fixed cost.
Costs that do not change with each unit should stay out of variable cost and remain in fixed costs. Monthly rent, salaried management, baseline software, and insurance usually belong in the fixed-cost side of the model. Mixing them into variable cost lowers contribution margin per unit and can make the break-even volume look higher than the real operating target.
No. Break-even analysis is an operating model that shows when contribution covers fixed costs. Taxable income uses tax rules and entity-specific reporting. A U.S. C corporation computes federal income tax by multiplying Form 1120 taxable income by 21%, while a U.S. sole proprietor reports Schedule C net profit or loss that flows to Schedule 1 of Form 1040.
Everhour separates internal cost rates from client-facing billable rates, with per-person defaults, per-project overrides, and dated rate changes. A service team can price billable work by project, member, or task, then compare labor cost and client-facing rates without rebuilding the rate history by hand.
Track labor cost and billable rates against real project work. Everhour keeps dated rate history and project-specific overrides connected, so break-even reviews reflect current project economics.
14-day free trial · No credit card · Cancel anytime
