Free Break-Even Calculator for Australian Businesses for Retail & E-commerce
For shop owners and online sellers who need to know how many orders or units cover overheads, freight and merchant fees before each sale turns a profit.
Last updated 31 May 2026
A break even calculator made for Australian retail and e-commerce reveals how many units or orders you must sell before your store, whether bricks-and-mortar or online, starts making money. Retail margins get eaten from every direction: wholesale cost of goods, freight in and out, payment processing fees, marketplace commissions, returns, and for physical shops, rent and staff wages with 11.5% super. Online sellers often underestimate how much shipping and merchant fees drag on contribution per order. By entering your fixed costs, your average selling price and the true variable cost of fulfilling each order, you see your break-even units, break-even revenue and contribution per unit. That tells you whether a free-shipping threshold actually pays for itself, how a price rise moves your break-even point, or how many sales a paid ad campaign needs to generate just to recover the cost of goods and the ad spend. It is the number that keeps growth profitable rather than just busy.
How to use this tool
- 1
Enter your fixed costs
Add up costs that do not change with sales volume: rent, insurance, software subscriptions, base wages plus 11.5% super, and accounting fees. Use a consistent period, usually one month, and enter the GST-exclusive figure.
- 2
Enter your price per unit and variable cost per unit
Price per unit is what the customer pays before GST. Variable cost per unit is what each sale costs you directly: stock, materials, packaging, merchant fees and freight. The calculator subtracts one from the other to find your contribution per unit.
- 3
Read your break-even point
You will see break-even units, break-even revenue and contribution per unit. Sell above the break-even units and you are in profit. Email the result to yourself or your bookkeeper to keep it on file for the next pricing review.
What the break-even point actually tells you
Your break-even point is the moment your total revenue equals your total costs: you make neither a profit nor a loss. Below it you are subsidising every sale; above it each unit adds its full contribution straight to your bottom line. The formula is simple but powerful: break-even units equal fixed costs divided by contribution per unit, where contribution is your price minus your variable cost per unit. The reason this matters more in Australia right now is cost pressure. Commercial rents, electricity and wages have all climbed, and the super guarantee sits at 11.5% on top of base pay. Many owners quietly let their break-even point creep up without noticing, then wonder why a busy month still ended in the red. Running the numbers forces clarity. If your break-even units look frighteningly high, you have three levers: lift your price, cut your variable cost per unit by renegotiating supply, or trim fixed overhead. A common trap is forgetting that GST is not yours to keep, so always work in GST-exclusive figures, otherwise your contribution per unit is overstated by 10% and your break-even point looks better than it is. Recalculate whenever a major cost changes, when you take on staff, or at the start of each financial year on 1 July when many supplier contracts and insurance premiums reset.
Fixed costs versus variable costs in an AU context
Getting the split right is where most break-even calculations go wrong. Fixed costs stay roughly the same whether you sell ten units or ten thousand: shop or workshop rent, public liability and professional indemnity insurance, your accounting software subscription, loan repayments, and the base salaries plus 11.5% super of permanent staff. Variable costs scale with each sale: the wholesale cost of stock, raw materials, packaging, freight, payment processing fees (typically 1.1% to 1.75% in Australia), and any commission or piece-rate labour. Some costs are genuinely mixed. Electricity has a fixed supply charge and a usage component; a casual employee paid only when rostered behaves more like a variable cost, while a salaried manager is fixed. Be honest about where each dollar belongs, because misclassifying a large variable cost as fixed will quietly distort your contribution per unit. Remember Fair Work obligations too: casual loading (commonly 25%), penalty rates and award minimums all feed into your true cost of delivering each unit or service hour. If you sell time rather than products, treat one billable hour as your unit, your charge-out rate as price, and the loaded wage cost of that hour as the variable cost. Once the categories are clean, your break-even point becomes a reliable planning number rather than a hopeful estimate.
Using break-even to make real pricing and hiring decisions
A break-even point is most useful when you turn it into a margin of safety: the gap between your actual sales and your break-even sales. If you break even at 286 units a month and typically sell 400, your margin of safety is 114 units, or about 28%. That cushion tells you how far sales can fall before you start losing money, which is exactly what you want to know before signing a lease, hiring a new team member, or committing to a big stock order. Use the calculator to model decisions before you make them. Thinking about a price rise? A small lift in price increases contribution per unit and pulls your break-even point down sharply, often more than owners expect. Considering a new hire on, say, $70,000 plus 11.5% super? Add roughly $78,000 a year, or $6,500 a month, to fixed costs and see how many extra units you need to sell to justify it. Weighing a discount or a Black Friday promotion? A 15% price cut can require a surprisingly large volume jump just to stay level. The point is that break-even analysis converts vague optimism into a number you can defend. Run several scenarios, keep the emailed results, and revisit them each quarter as your costs move.
From a one-off calculation to an always-current number
This calculator gives you a clean snapshot, but in a real business your inputs never sit still. Supplier prices change, you put on casuals over a busy season, merchant fees shift, and the financial year resets your insurance and software costs every 1 July. Most owners recalculate break-even once, file it away, then operate for months on stale numbers, which is exactly when a quietly rising break-even point catches them out. The practical upgrade is to connect the figures you already track. Your accounting system (Xero, MYOB or QuickBooks) holds your fixed costs, your point-of-sale or e-commerce platform holds your prices and volumes, and your supplier invoices hold your variable costs. When those sources feed a live break-even dashboard, you stop guessing and start seeing your margin of safety update in real time. That is the kind of reporting Clever Ops builds for Australian mid-market businesses: pulling data from the tools you run today into a single, always-current view, so a number like break-even stops being a once-a-year spreadsheet exercise and becomes something you glance at before every pricing or hiring call. The calculator is a great starting point. Automating it is how it actually changes decisions.
Hidden variable costs that move retail break-even
The biggest mistake retail and e-commerce sellers make is treating the wholesale cost of a product as the only variable cost. In reality each order carries freight, packaging, payment processing (typically 1.1% to 1.75% plus a fixed fee per transaction in Australia), and on platforms like eBay, Amazon AU, Catch or Etsy, marketplace commissions of 10% or more. Add returns: in apparel especially, a meaningful share of orders come back, and the return freight plus restocking effort is a real cost that quietly lifts your true break-even point. To get an honest result, treat one order or one unit as your unit, your average selling price (GST-exclusive) as the price, and the fully loaded fulfilment cost as the variable cost. Free shipping deserves special attention: if you absorb postage, that cost belongs in your variable cost per order, and a free-shipping threshold should be set above your break-even order value, not below it. Fixed costs differ by channel. A physical shop carries rent, fit-out, insurance and rostered staff with super. A pure online store may have low fixed costs but higher per-order variable costs, plus subscriptions for your platform, apps and email tools. Many AU sellers run both, so calculate break-even per channel rather than blending them, because the channel that looks busiest is not always the one that breaks even soonest. Finally, always strip out GST and remember inventory you have paid for but not sold ties up cash, so a low break-even point on paper still needs healthy stock turnover to translate into real cash flow.
Worked example
A small Melbourne homewares brand wants to know how many scented candles it must sell each month before its new range turns a profit.
- Fixed costs (per month, GST-exclusive)
- $8,000
- Price per unit (GST-exclusive)
- $45
- Variable cost per unit
- $17
Contribution per unit: $28. Break-even units: 286 candles per month. Break-even revenue: $12,870 per month.
Each candle contributes $28 toward fixed costs after the $17 of wax, glass, wick and packaging is covered. Dividing $8,000 of fixed costs by that $28 contribution gives 285.7, rounded up to 286 candles, because you cannot sell a part-candle. At $45 each, those 286 units bring in $12,870 of break-even revenue. Sell the 287th candle and $28 drops straight to profit. If the brand typically sells 400 candles a month, its margin of safety is 114 units, around 28%, a healthy cushion before losses begin.
Who uses this tool
Online apparel store owner
Factors in return rates, free shipping and Shopify payment fees to find the true number of orders per month needed to break even, not just the headline cost of goods.
Bricks-and-mortar retailer
Calculates how many units a day must sell to cover shop rent, casual staff with penalty rates and super, and EFTPOS fees before the store turns a profit.
Marketplace seller running paid ads
Models how many sales an Amazon AU or eBay campaign must generate to recover ad spend, commission and cost of goods before the campaign is genuinely profitable.
Frequently asked questions
What is the break-even formula this calculator uses?
Break-even units equal fixed costs divided by contribution per unit, where contribution per unit is your price per unit minus your variable cost per unit. Break-even revenue is then break-even units multiplied by price per unit. For example, $8,000 in fixed costs divided by a $28 contribution gives roughly 286 units, and 286 units at $45 each equals $12,870 in break-even revenue.
Should I use GST-inclusive or GST-exclusive figures?
Always use GST-exclusive figures. GST is collected on behalf of the ATO and is not your revenue, so including it overstates both your price per unit and your contribution, making your break-even point look better than it really is. Enter the net price the customer pays before the 10% GST is added, and use net costs from your supplier invoices too.
What counts as a fixed cost versus a variable cost?
Fixed costs stay the same regardless of sales: rent, insurance, software, loan repayments and base salaries plus 11.5% super. Variable costs change with each sale: stock, materials, packaging, freight and merchant fees. Casual staff paid only when rostered behave like variable costs, while permanent salaried staff are fixed. Classifying them correctly is essential for an accurate result.
How does the 11.5% super guarantee affect break-even?
Superannuation is a real cost of employing people, so it belongs in your calculation. For permanent staff, add 11.5% super on top of base wages and include the total in fixed costs. For casual or piece-rate labour tied to each sale, add the super to your variable cost per unit. Leaving super out understates your costs and pushes your break-even point artificially low.
How often should I recalculate my break-even point?
Recalculate whenever a major cost moves: a rent review, a price rise from a key supplier, a new hire, or a change to your own pricing. At a minimum, redo it at the start of each financial year on 1 July, when insurance premiums, software subscriptions and many supplier contracts reset. A break-even point left unchecked for a year is usually wrong by the time you need it.
What is a margin of safety and why does it matter?
Your margin of safety is the gap between your actual sales and your break-even sales, expressed in units or as a percentage. If you break even at 286 units and sell 400, your margin of safety is 114 units, about 28%. It tells you how far sales can fall before you start losing money, which is exactly the cushion you want to understand before signing a lease, ordering stock or hiring.