Contribution margin is what remains from each unit’s price after paying the variable cost of that unit. It “contributes” toward covering fixed costs and, after that, profit.
Formula
Margin = price − variable cost. Margin % = margin ÷ price × 100.
Sample
Price $50.00 · variable $30.00 → margin $20.00 (40% of price). Open sample
Related
Frequently asked questions
What is contribution margin?
Selling price minus variable cost per unit—the amount available to cover fixed costs and profit.
How does it relate to break-even?
Break-even units equal fixed costs divided by contribution margin when margin is positive.
Related tool
See margin in the free tool
Price, variable cost, fixed costs.
Open break-even calculatorSources linked above include U.S. government materials (for example CFPB, FDIC, NCUA, BLS, IRS) where noted. Sample math uses only labeled Nestfigure assumptions—not bank quotes, job offers, or personalized advice. Last reviewed: August 9, 2026.