FINBIZTOOLS
Break-Even ROAS Calculator
Find the return on ad spend you need just to break even. Enter your gross margin and see the ROAS at which ad revenue covers product cost and ad spend.
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Changes the currency symbol and number format only. Amounts are not converted.
How to use the Break-Even ROAS Calculator
- Work out your gross margin as a percentage of the selling price.
- Enter that gross margin.
- Select Calculate to see the break-even ROAS.
Use the currency selector above the inputs to change the symbol. It changes the display only and does not convert amounts.
Why break-even ROAS depends on margin
Ad revenue is not profit. Only the gross margin portion of each sale is left to pay for advertising.
Break-even ROAS is therefore one divided by the margin, so thinner margins need a higher ROAS just to break even.
How the calculation works
Break-Even ROAS Calculator formula
Break-even ROAS = 100 ÷ Gross margin (%)
- Gross margin is the share of revenue left after product cost.
- A margin of zero is rejected because no ROAS could break even.
This ignores overheads other than product cost and ad spend.
Break-Even ROAS Calculator example
A 40% gross margin:
| Gross margin | 40% |
|---|
| Gross margin | 40% |
|---|---|
| Break-even ROAS | 2.50 |
Amounts are shown without a currency symbol because the arithmetic is identical in any currency; the currency selector only changes the symbol and number format. A ROAS of 2.5 means 2.5 in revenue per 1 of ad spend.
Assumptions and limitations
Assumptions
- Gross margin is the same on every sale.
- Only product cost and ad spend are considered.
Limitations and why results can differ
- It ignores shipping, fees and overheads unless included in your margin.
- A campaign at break-even still earns no profit.
Frequently asked questions
Is break-even ROAS the same as a good ROAS?
No. It is the minimum to avoid losing money on that margin. A target above it leaves profit.
Which margin should I use?
Use your gross margin after product cost and any order-level costs you want included.
Why is a zero margin rejected?
With no margin, ad revenue can never cover ad spend, so break-even ROAS would be unbounded.
How do I measure my actual ROAS?
Use the ROAS Calculator with your ad revenue and ad spend.
Methodology
Inputs are validated as finite numbers within the ranges shown on the calculator, and division by zero is rejected. The result is computed directly from the formula on this page with no intermediate rounding beyond the stated display rounding.
The calculation runs in your browser and inputs are not sent to a server.
Last reviewed:
Disclaimer
Results are calculated estimates based on the figures you enter. They are not accounting, pricing, tax or legal advice. Verify important business and pricing decisions with your own records and a qualified professional. Read the full Disclaimer.
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This tool is part of Freelancing and E-commerce.
Freelancers often start with an hourly or day rate before quoting a project; shops often start with order value and profit per order.