About the Small Business Budget Calculator
This small business budget calculator turns your expected monthly revenue and the main expense categories into a simple operating budget. Enter sales, your cost of goods sold as a percentage of sales, and monthly amounts for rent, payroll, utilities, insurance, marketing, software, professional fees, loan payments and other costs. It returns gross profit, total expenses, net profit before tax, profit margin, a tax set-aside, annual totals and the revenue you need each month to break even.
It is designed for new business owners writing a first budget or business plan, established owners checking whether their cost structure still works, and anyone preparing numbers for a lender. The table shows each line monthly, annually and as a percentage of revenue, so you can quickly see which costs are out of proportion.
Payroll taxes and benefits are estimated as a percentage of wages, and the tax reserve is a simple percentage of positive profit to set aside — your actual tax depends on your entity type and location. Because loan payments include principal, the bottom line is closer to monthly cash flow than accounting profit.
With the default inputs, the monthly net profit (before tax) is $3,900.00. Change any value above to recalculate instantly.
How to use the small business budget calculator
- 1Enter expected monthly revenue and your cost of goods sold as a % of sales.
- 2Fill in each monthly expense category; leave any that do not apply at 0.
- 3Set payroll taxes and benefits as a % of wages.
- 4Choose a percentage of profit to set aside for income tax.
- 5Review net profit, margin and break-even revenue, then adjust the plan.
Formula and method
The budget follows a simple income statement. Cost of goods sold scales with revenue, so it is entered as a percentage; subtracting it gives gross profit. Operating expenses are mostly fixed month to month and are entered as amounts, with payroll taxes and benefits estimated as a percentage of wages. Gross profit minus total operating expenses is net profit before tax.
Break-even revenue is the sales level at which gross profit exactly covers operating expenses: operating expenses divided by the gross margin (1 − COGS%). The tax set-aside applies your chosen percentage to positive profit only. Annual figures are the monthly figures × 12, assuming no seasonality.
- COGS%
- Cost of goods sold as a share of revenue
- Operating expenses
- Rent, payroll, payroll taxes, utilities, insurance, marketing, software, fees, loans and other costs
Worked examples
Retail shop with $40k monthly sales
COGS at 35% is $14,000, leaving $26,000 gross profit. Operating expenses total $22,100 including $1,800 of payroll taxes and benefits (15% of $12,000), so pre-tax profit is $3,900 a month (9.75%). Setting aside 25% leaves $2,925, and break-even revenue is $22,100 ÷ 0.65 = $34,000.
Service business with no COGS
With no cost of goods, all $15,000 is gross profit. Expenses of $7,850 (including $400 of payroll costs) leave $7,150 a month, a 47.7% margin, or $85,800 a year before tax. Break-even revenue equals the $7,850 of expenses.
Same shop in a slow month
At $30,000 of sales the shop earns $19,500 gross profit, $2,600 short of its $22,100 expenses. No tax set-aside is needed on a loss, and sales must reach $34,000 to break even.
Frequently asked questions
How do I create a budget for a small business?+
Estimate monthly revenue from past sales or a realistic forecast, subtract cost of goods sold, then list every operating expense — rent, payroll, payroll taxes, utilities, insurance, marketing, software, fees, loan payments and other costs. What remains is profit; review it monthly against actual results.
What percentage of revenue should go to expenses?+
There is no single right split: a retailer’s largest cost is usually the goods it resells, while a service firm’s is usually payroll. Use the % of revenue column to spot outliers, and compare your ratios with benchmarks from your trade association, accountant or lender for your industry and size.
Should loan payments be in my budget?+
For cash planning, yes — the whole payment leaves your bank account. For an accounting profit-and-loss budget, include only the interest portion and treat principal as debt repayment. This calculator includes the full payment so the bottom line approximates cash flow.
How much should I set aside for taxes?+
Many owners of US pass-through businesses set aside around 25–35% of profit to cover federal and state income tax and self-employment tax, but your rate depends on your entity, income and location. Use the self-employment tax calculator for a more precise estimate.
What is the difference between gross profit and net profit?+
Gross profit is revenue minus cost of goods sold. Net profit is what remains after also paying all operating expenses. A healthy gross margin is necessary but not sufficient — overhead can still consume it.
How often should I update my business budget?+
Review actual results against the budget every month and revise the budget at least quarterly, or whenever a major change happens such as a new hire, a lease renewal or a price change.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.