Chartered Financial Analyst specializing in education and consulting business models.
Determine how many hours you must tutor each month to cover all business costs. Enter any three variables—Monthly Fixed Costs, Price per Hour, Variable Cost per Hour, or Breakeven Hours—to solve for the fourth.
Tutoring Breakeven Calculator
Tutoring Breakeven Formula
The breakeven formula for a tutor finds the number of hours (Q) they must bill for total monthly revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Price per Hour (P):
P = (F / Q) + V
Solve for Variable Cost per Hour (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., scheduling software, website hosting, insurance, office rent, internet).
- Price per Hour (P): Your average hourly rate charged to clients.
- Variable Cost per Hour (V): The direct costs per hour of tutoring (e.g., worksheet materials, travel costs, online platform fees).
- Breakeven Hours (Q): The total number of hours you need to bill to reach $0 in monthly profit.
Related Calculators
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What is a Tutoring Breakeven Point?
A **Tutoring Breakeven Point** is the number of paid hours a tutor must work each month to cover their total business costs. It is the minimum number of hours required to start being profitable.
**Fixed Costs (F)** are your monthly “overhead.” These are expenses you pay every month, even if you have no students. This includes scheduling software (like Calendly), website hosting, business insurance, accounting software, and any rent for an office space.
**Variable Costs (V)** are the costs tied *directly* to each hour you tutor. For an online tutor, this might be the per-session fee for a tutoring platform or credit card processing fees. For an in-person tutor, this is primarily travel costs (gas, mileage) and any physical materials (worksheets, notebooks) provided to the student.
The **Contribution Margin** (P – V) is the profit you make from a single hour of tutoring, which is then used to pay down your fixed costs. This calculator determines how many hours are needed to cover your total monthly overhead.
How to Calculate Tutoring Breakeven (Example)
Let’s calculate the breakeven point for a professional tutor.
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Identify Monthly Fixed Costs (F):
The tutor has $800 in monthly software, insurance, and marketing costs.
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Identify Price per Hour (P):
The tutor charges $60 per hour.
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Identify Variable Cost (V):
Each hour has $10 in platform fees and material costs.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per hour: $60 (P) – $10 (V) = $50.
Next, divide the fixed costs by this margin:
Q = $800 / $50 = 16 -
Conclusion:
The tutor must bill 16 hours each month to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
You must use an **average price per hour (P)**. If you tutor 10 hours at $60/hr and 5 group hours at $100/hr, your (P) is not $80. You should use your total revenue divided by total hours to find the true average.
It is a **Fixed Cost (F)**. You pay the monthly subscription fee (e.g., $15/mo) whether you tutor 1 hour or 100 hours.
Travel costs (gas, mileage depreciation) are a **Variable Cost (V)**. Calculate the average cost per session and add it to (V). If you only tutor online, your (V) for travel is $0.
This is a powerful function. Set your (F) (e.g., $800), (V) (e.g., $10), and a realistic number of hours you want to work (Q) (e.g., 20 hours/mo). Solve for (P) to find your minimum rate: `P = ($800 / 20) + $10 = $40 + $10 = $50`. You must charge at least $50/hr.