ClarityKitFind a tool
Business

Contribution Margin Calculator

Calculate revenue remaining after variable costs to cover fixed costs and profit.

Use a consistent reporting periodCheck the calculation below

Your business figures

Runs on your device

METRIC SNAPSHOT

Your result

Let’s calculate.

Use the Calculate button to see your result.

Review the method below for assumptions and conventions.

How to use this tool

  1. Enter revenue, variable costs.
  2. Select Calculate to view the result.
  3. Check the method and assumptions below before using the result.

The method, explained

Contribution margin = revenue − variable costs. Contribution margin ratio = contribution margin ÷ revenue × 100.

A WORKED EXAMPLE

Revenue of 10,000 minus variable costs of 6,000 leaves contribution of 4,000, or 40% of revenue.

What to keep in mind

Only variable costs belong in this subtraction. Fixed costs still need coverage; contribution is not net profit.

Common questions

Can contribution be negative?

Yes. That occurs when variable costs exceed revenue under the supplied assumptions.

How does it connect to break-even?

Fixed costs divided by contribution per unit gives the unit break-even threshold when assumptions remain constant.

Methodology maintained by ClarityKit. How these tools are built and checked.