Free tool · runs in your browser
Contribution margin calculator
Contribution margin is revenue minus variable costs. Work it out for a product’s month, or per unit for one sale, and see the ratio and what it takes to cover fixed costs. Figures are in USD and stay in this tab.
How contribution margin is calculated
contribution margin = revenue − variable costs
margin ratio = contribution margin ÷ revenue
break-even revenue = fixed costs ÷ margin ratio
Example: an app earns $1,900 in a month. Apple keeps 15%, so $285 goes to commission, and AI API calls cost $60. The contribution margin is $1,555, a ratio of 81.8%. With $73 of hosting and tools, $1,482 is left. At that ratio, about $89 of monthly revenue covers the fixed costs.
Contribution margin per unit
Per unit works the same way for one sale: price minus the variable costs of that sale. A $9.99 monthly subscription loses $1.50 to a 15% commission and $0.80 to API calls, leaving $7.69. Divide fixed costs by that number to get the sales you need each month: $73 ÷ $7.69 ≈ 10 subscribers. Switch the calculator to Per unit to try your own prices.
Variable or fixed?
A cost is variable when it grows with each sale or each active user. If you are unsure, ask: would this bill go up next month if sales doubled?
| Cost | Usually |
|---|---|
| App Store or Google Play commission | Variable |
| Stripe or Paddle fees | Variable |
| OpenAI, Anthropic or other model API usage | Variable |
| Hosting or database plan | Fixed, until you change tier |
| Apple Developer Program, domain, design tools | Fixed |
This is a planning estimate, not accounting or tax advice.
Questions
How do I calculate contribution margin per unit?
Take the price of one unit, such as one month of a subscription, and subtract the variable costs of that one sale: store commission, payment fees and per-user costs such as API calls. Divide fixed costs by the result to get break-even sales.
What is a good contribution margin ratio for an app?
There is no single target. Apps without per-user API costs often keep more than 70% after store commission; apps that call paid AI models can fall much lower as usage grows. Compare a product with its own earlier months first.
How is contribution margin different from gross margin?
Gross margin subtracts cost of goods sold, which can include some fixed costs. Contribution margin subtracts only costs that move with sales, so it shows what each extra sale adds.
Should I enter revenue before or after Apple’s commission?
Either works. If your figure is already after the store’s cut, such as App Store proceeds or RevenueCat proceeds, set the store or payment fee to 0%.
What does MarginDeck call contribution profit?
Revenue minus every cost you assign to a product, fixed or variable. It answers whether the product paid for itself in a given month.