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Contribution Margin Calculator

Use values from the same period and currency. Fees and taxes apply only where explicitly included in inputs.

Use values from the same period and currency. Fees and taxes apply only where explicitly included in inputs.

Your workbenchInputs are not stored

Result

Enter your values and run the tool to see your result.

What this tool does

Computes contribution margin and its ratio: revenue minus variable cost. Contribution margin is what covers fixed cost and then becomes profit, and it is the denominator in break-even analysis.

How to use it

  1. Choose a period and enter revenue for it.
  2. Enter total variable cost for the same period.
  3. Run it to get both the contribution amount and the ratio.

Worked example

Revenue 1,000 and variable cost 600 give a contribution margin of 400 and a ratio of 40%.

Calculation method

Contribution marginsales-variable
Contribution margin ratio(sales-variable)/sales*100

Frequently asked questions

Which costs are variable?
Costs that scale with volume: materials, payment fees, packaging and shipping, sales commission. Rent and salaried pay are excluded.
What is the ratio used for?
Fixed cost ÷ contribution ratio gives break-even revenue. With a 40% ratio and 400 of fixed cost, break-even revenue is 1,000.

What this tool does not cover

The result depends heavily on how you split costs into fixed and variable. Semi-variable costs (base fee plus usage) should be split in two for accuracy.

References