Skip to content
Profit Geeks

Free ROAS calculator · No signup

ROAS and break-even ROAS calculator.

Return on ad spend, calculated honestly. Enter spend, revenue, and gross margin. The calculator returns ROAS, the break-even ROAS your margin actually requires, and whether you are generating profit or quietly losing money.

$

Total media spend last month, across every channel.

$

Best-case attribution. Use the ad-platform reported revenue if your CRM is not connected.

%

Revenue minus cost of goods, divided by revenue. Most growth-focused brands sit between 30 and 70 percent.

Result

ROAS

3.00x

Break-even ROAS

1.82x

What your margin actually needs.

Gross profit (before ads)

$16,500

Net after ad spend

$6,500

Ad spend / revenue

33.3%

Verdict

Healthy

Reading the verdict

Your 3.00x ROAS is comfortably above the 1.82x your margin requires. The harder question is how much further you can push spend before the curve flattens.

MER and POAS calculatorCAC calculatorLTV calculatorFull Ad Spend CalculatorAll free calculators

How ROAS is calculated

What is ROAS?

ROAS means return on ad spend: the revenue your ads bring in, divided by what you spent on them. ROAS = revenue from ads ÷ ad spend, written as a multiple. A $30,000 return on $10,000 of spend is a 3.0x ROAS, sometimes shown as 300 percent.

The number ignores cost of goods, fulfilment, and overhead. It tells you what came back from the platforms, not what hit the bank account.

What is break-even ROAS?

The lowest ROAS at which ad revenue covers its cost of goods and the ad spend itself. Calculated as 1 ÷ gross margin. A business running 50 percent gross margin needs at least a 2.0x ROAS to clear cost of goods. Anything less means every order loses money.

The break-even number is what most agency dashboards quietly skip. Without it, ROAS targets are arbitrary.

Break-even ROAS by gross margin

What ROAS do you need to break even?

One divided by your gross margin. A campaign has to clear that number before any margin lands; at or near it, the channel is buying market share rather than making money.

Break-even ROAS calculated as 1 ÷ gross margin and rounded to one decimal place. It covers cost of goods only; to include overhead, use 1 ÷ (gross margin − overhead as a share of revenue).
Gross marginBreak-even ROASTypical for
20%5.0xDiscount retail, marketplace resellers
30%3.3xMost ecommerce, low-margin services
50%2.0xMid-margin DTC, lead-gen
70%1.4xSaaS, high-margin services
85%1.2xSoftware, digital products

Margins vary within every industry, so use your own. For a starting point by sector, see break-even ROAS by industry. If you are setting a search budget rather than judging one, start with Google Ads costs in Australia.

ROAS, MER and POAS

Which return metric should you use?

Use ROAS to judge one channel or campaign, MER to judge total marketing against total revenue, and POAS when margins differ a lot between the products you sell.

ROAS
Revenue from ads ÷ ad spend. Break-even is 1 ÷ gross margin.
MER
Marketing efficiency ratio: total revenue ÷ total marketing spend, whichever channel claims the sale.
POAS
Profit on ad spend: gross profit from ads ÷ ad spend. Break-even is 1.0, whatever the margin.
Open the MER and POAS calculator

Why platform ROAS rarely matches the bank

Why is platform ROAS higher than the bank says?

Usually because the platform is counting sales it did not cause or counting the same sale more than once. Three causes account for most of the gap.

  1. Reason 01

    Deduplication failures

    When the browser pixel and the server-side event both fire without a shared event ID, the platform counts the same conversion twice. Reported revenue and ROAS go up; the bank does not.

  2. Reason 02

    View-through credit

    Meta counts a sale when someone was shown an ad, did not click, and bought within a day, and folds it into the headline results by default. Google Ads keeps view-through conversions in their own column, but the window can be set much wider. Blend either into a headline ROAS and organic and brand-search sales get credited to ads.

  3. Reason 03

    Conversions firing on the thank-you page

    A conversion set to fire on a thank-you page view counts refreshes, bookmarks and repeat visits as new sales. Firing the event on the order itself, deduplicated on the order ID, removes them.

A tracking audit shows which of these is inflating your numbers, and how marketing attribution works explains the models behind the platform figure.

Frequently asked

Questions about ROAS and break-even ROAS.

What is ROAS?

ROAS stands for return on ad spend. It is the revenue your ads generate divided by what you spent on them, written as a multiple. A $30,000 return on $10,000 of ad spend is a 3.0x ROAS, sometimes shown as 300 percent. It measures revenue, not profit, which is why it needs a break-even ROAS beside it.

How do you calculate ROAS?

ROAS = revenue from ads ÷ ad spend, using the same date range for both. Most ad platforms report platform-attributed ROAS, which counts the revenue each platform claims for itself. The number that matters more is ROAS on the revenue your CRM or store actually recorded, read against the break-even ROAS your gross margin sets. The calculator on this page does the division and puts the two side by side.

What is a good ROAS?

There is no universal good ROAS. The threshold that matters is your break-even ROAS, calculated as 1 ÷ gross margin. A 50 percent margin business breaks even at 2.0x. A 30 percent margin business breaks even at roughly 3.3x. Good starts above your break-even and scales from there; below it, every order loses money.

Is a 2.5 ROAS good?

It depends on your gross margin. A 2.5x ROAS is exactly break-even at a 40 percent gross margin, because 1 ÷ 0.4 = 2.5. With a margin above 40 percent it makes money before overhead. With a margin below that, each order loses money: a business on a 30 percent margin needs about 3.3x just to break even.

What does a 4:1 ROAS mean?

Every $1 of ad spend brought back $4 of revenue. It is the same thing as a 4.0x ROAS or 400 percent. Whether it is good depends on margin: 4.0x is only break-even for a business on a 25 percent gross margin (1 ÷ 0.25 = 4), and comfortably profitable for one on 50 percent, which breaks even at 2.0x.

What is break-even ROAS, and how do I calculate it?

Break-even ROAS is the lowest ROAS at which ad revenue covers its cost of goods and the ad spend itself. The formula is 1 ÷ gross margin. For a stricter version that also covers overhead, use 1 ÷ (gross margin − overhead as a share of revenue). A business on a 50 percent gross margin with overhead at 10 percent of revenue breaks even at 1 ÷ 0.4 = 2.5x, not 2.0x. Below break-even, every order destroys margin. Above it, each additional dollar of spend adds profit.

What is the difference between ROAS and ROI?

ROAS only measures revenue against ad spend. ROI (return on investment) measures profit, meaning revenue minus all costs including cost of goods and overhead, against the total investment. A 3.0x ROAS can be a positive ROI for a high-margin business and a negative ROI for a low-margin one.

Why does my ROAS reported by Meta differ from the bank?

Three common reasons: the same order counted twice because the pixel and the server event are not deduplicated, view-through conversions crediting ads people saw but never clicked, and a conversion event firing on the thank-you page view rather than on the order itself. A two-week tracking audit shows which of these is happening, and fixing them usually brings the gap to within five percent.

What if my ROAS is below break-even but the channel feels essential?

It usually means one of two things: the attribution is misallocated (the channel is genuinely contributing but the credit is going elsewhere), or the channel is a brand cost dressed up as a performance channel. An incrementality test will tell you which it is.

All free calculatorsAttribution glossary