Formula and example checked against automated tests · 15 November 2026
What is left after each sale?
Contribution is the money remaining after the costs tied to a sale. It helps cover rent, salaries, and other fixed costs. Enter the selling price after discounts, the cost per sale, percentage fees, and the fixed costs for one period. Use amounts consistently, excluding any tax you collect on behalf of a tax authority.
Include product cost, packaging, shipping you pay, flat payment fees, and returns allowances in cost per sale. Keep percentage payment or marketplace fees in the fees field to avoid counting them twice. This calculator assumes each sale has the same price and costs.
The formulas
Contribution margin = contribution ÷ price × 100
Markup before fees = (price − cost) ÷ cost × 100
Target price = cost ÷ (1 − (fee % + target margin %) ÷ 100)
Break-even sales = round up(fixed costs ÷ contribution)
A worked example
A selling price of 100, cost of 60, and 3% fee leave 37 per sale. The contribution margin is 37%, while markup before fees is 66.67%. Covering 500 of fixed costs requires 14 sales. A target contribution margin of 30% requires a price of about 89.55 at those costs and fees.
How to interpret the result
A positive contribution does not mean the business is profitable overall. Fixed costs, tax, financing, inventory losses, and owner time may still need to be covered. The target-price result assumes costs and fee rates remain unchanged when the price changes. Rounding the actual sale price can slightly change the achieved margin.
Why are margin and markup different?
Margin divides profit or contribution by the selling price. Markup divides the increase over cost by the cost. A cost of 60 and price of 100 produce a 40% gross margin before fees but 66.67% markup.
What happens if contribution is zero or negative?
Additional sales cannot cover fixed costs under these assumptions. Raise the price, reduce variable costs, or reassess fees. A zero cost makes markup undefined. With no per-sale costs, the contribution margin stays at 100% minus the fee rate, so any positive price meets a target at or below that level. Results use floating-point arithmetic and displayed currency rounding; verify amounts before accounting use.
Reference: Shopify’s margin explanation. EzzeTools adds explicit percentage fees and fixed-cost break-even calculations.