What is contribution margin?
Contribution margin is the amount left from each sale after subtracting variable costs (like materials or per-unit labor). That leftover amount “contributes” toward paying fixed costs and, eventually, profit.
How this calculator works
Enter the selling price per unit, the variable cost to produce or deliver one unit, and the number of units sold. The calculator subtracts variable cost from price to get contribution margin per unit, divides that by price for the contribution margin ratio, and multiplies by units sold for the total contribution margin.
A higher contribution margin ratio generally means more of each sale is available to cover fixed costs and profit. This tool is for general business planning purposes.
Last reviewed August 2026