How do you calculate break-even for a restaurant?

Restaurant break-even is calculated by dividing total fixed costs by the contribution margin ratio. Contribution margin ratio equals (revenue minus variable costs) divided by revenue. For example, if fixed costs are $25,000/month and your contribution margin ratio is 65%, break-even revenue is $25,000 / 0.65 = $38,462/month. This tells you exactly how much revenue you need to cover all costs before generating profit.

What are fixed costs vs variable costs for a restaurant?

Fixed costs stay the same regardless of sales volume: rent, insurance, loan payments, salaried staff, and utilities. Variable costs change with sales volume: food and beverage costs, hourly labor, credit card processing fees, and supplies. Most restaurant fixed costs run $15,000-$60,000 per month depending on size and market.

What is a good break-even point for a new restaurant?

A healthy restaurant should break even at 60-70% of its realistic capacity. If you need 100% occupancy every day just to break even, your fixed costs are too high relative to your revenue potential. New restaurants typically reach break-even revenue by months 4-9 as they build a customer base and optimize operations.

How many covers does a restaurant need to break even?

The number of covers needed to break even depends on your average check size and contribution margin. Divide your break-even revenue by your average check per cover. For example, if break-even is $40,000/month and average check is $22, you need approximately 1,818 covers per month or about 61 covers per day on a 30-day month.

Restaurant Break-Even Calculator

Find your break-even revenue, required covers, and profit scenarios -- all in one calculation.

Break-even is the revenue number at which your operation covers all costs with zero profit. Everything above that number is your margin of safety. Understanding break-even is not optional in hospitality -- it is the foundation of every staffing decision, pricing decision, and hour-of-operation decision you make.

This calculator uses the contribution margin method: fixed costs divided by (1 minus variable cost percentage). Variable cost percentage is your combined food cost, labor cost, and variable overhead as a fraction of revenue. Results show break-even revenue, required daily covers, and profit scenarios at 10%, 15%, and 20% above break-even. Results appear instantly -- no email required.

How to Calculate Restaurant Break-Even Point

The contribution margin method is the most accurate approach for restaurants. Start with your total monthly fixed costs -- rent, salaried labor, insurance, loan payments, and other costs that do not change with sales volume. Then calculate your variable cost percentage: the combined percentage of revenue that goes to food cost, hourly labor, and variable overhead. Your break-even revenue equals fixed costs divided by (1 minus variable cost percentage). A restaurant with $30,000 in monthly fixed costs and a 65% variable cost rate breaks even at $85,714 per month.

Why Your Break-Even Number Matters Before You Open

Most restaurant failures are not operational failures -- they are financial planning failures. Operators open without knowing their break-even number, which means they do not know how many covers they need per day, how many hours they need to be open, or whether their pricing supports their cost structure. This calculator is the first thing to run when evaluating a new restaurant concept, a location change, or a significant menu or hours change.

Venue Type

Fixed Costs (Monthly)

Rent / Occupancy ($) Includes CAM, insurance, property taxes if applicable

Fixed Labor ($) Salaried staff, guaranteed-hours employees

Utilities ($) Gas, electric, water -- average monthly

Insurance ($) General liability, liquor, workers comp

Loan / Debt Service ($) SBA or bank loan monthly payment

Other Fixed Costs ($) POS fees, subscriptions, marketing, etc.

Variable Cost Rate and Revenue

Variable Cost % of Revenue Combined food, variable labor, and variable overhead as % of revenue

Average Check / Cover ($) Average per-guest revenue across all day parts

Days Open Per Month

Seats / Capacity Used to calculate seat turn requirements

Please fill in all fixed cost fields, variable cost %, average check, and days open.

Results appear instantly below. No email required.

Monthly Break-Even Revenue

Break-Even Overview

Monthly Break-Even Revenue

Daily Revenue Required

Daily Covers Required

Contribution Margin %

Revenue Scenarios

Scenario	Monthly Revenue	Daily Covers	Monthly Profit	Margin

Revenue above break-even contributes to profit at the contribution margin rate. Scenarios assume constant variable cost rate and check average.

Fixed Cost Breakdown

Cost Category	Monthly Amount	% of Total Fixed

What If Your Check Average Changes?

A $2 increase in check average is often achievable through menu engineering, training on add-ons, or beverage attachment -- and it significantly reduces your break-even cover count.

Margin of Safety

Industry Context for Your Venue Type

How to Improve Your Break-Even Position

Every Dollar Above Break-Even Requires Operational Precision

The difference between a night that clears break-even and one that does not often comes down to execution -- covers that should have turned, upsells that did not happen, a section that ran understaffed because the opening team was not briefed. ShiftBaton keeps every shift starting with the information it needs to execute. Less friction, more covers, tighter margins.

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How to Calculate Restaurant Break-Even Point

Why Your Break-Even Number Matters Before You Open

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Every Dollar Above Break-Even Requires Operational Precision