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The ROAS calculator that asks about your margin.
Free tool · break-even ROAS included · no email required · nothing stored
Return on ad spend on its own cannot tell you whether your ads are working. A 4x ROAS is excellent for a business with 70 percent margins and a loss for one selling at 20 percent.
So this calculator asks for your gross margin and works out your break-even ROAS first, which is the number that actually decides whether to spend more or stop. It will also include your agency's management fee, if you pay one, because that fee comes out of the same profit.
Your ROAS
4.00x
The part most calculators leave out
What is a good ROAS?
There is no universal answer, and anyone who gives you one without asking about your margins is guessing. The honest version takes one line of arithmetic.
How to calculate break-even ROAS
Your break-even ROAS is 1 divided by your gross margin. That is the point where the ads pay for themselves and nothing more. Everything above it is profit. Everything below it is a slow leak that a dashboard full of green numbers will happily hide.
At 70 percent margin you break even at 1.43x. At 50 percent, 2.00x. At 30 percent, 3.33x. At 20 percent, 5.00x.
Which means a 4x ROAS is a strong result for a consultancy and a losing campaign for a shop selling at 20 percent. Same number, opposite decisions.
| Gross margin | Break-even ROAS |
|---|---|
| 20 percent | 5.00x |
| 25 percent | 4.00x |
| 30 percent | 3.33x |
| 35 percent | 2.86x |
| 40 percent | 2.50x |
| 45 percent | 2.22x |
| 50 percent | 2.00x |
| 55 percent | 1.82x |
| 60 percent | 1.67x |
| 65 percent | 1.54x |
| 70 percent | 1.43x |
| 75 percent | 1.33x |
| 80 percent | 1.25x |
Break-even ROAS is 1 divided by gross margin written as a decimal. Arithmetic, not a benchmark.
Two things to watch once you have the number.
A management fee changes it. If you pay 15 percent of spend to have the ads run, your real break-even moves up, because that fee is paid out of the same gross profit. On $2,000 of spend at 50 percent margin, the break-even goes from 2.00x to 2.30x. That is the difference between a campaign you keep and one you should question. The calculator above includes it because leaving it out flatters the result.
The revenue number is usually the weak link. ROAS is only as honest as the tracking underneath it, and platform-reported revenue is routinely higher than what lands in the bank. Before you act on any ROAS, submit a test purchase or enquiry yourself and confirm it was recorded correctly. In my experience that single check finds more problems than any amount of campaign optimisation.
And what about target ROAS?
Break-even tells you the floor. Target ROAS tells you the goal, and it is the same arithmetic with your profit added on top. Decide what you want these ads to make, add that to your ad spend and any management fee, divide by your gross margin, and you have the revenue you need. Divide that by your spend and you have the ROAS to aim at. The optional target field in the calculator does it for you.
It is worth doing in that order. A target picked without reference to break-even is a wish. A target that sits a known distance above break-even is a plan, and it tells you immediately whether the number you want is reachable on the budget you have.
ROAS and profit are not the same thing
A rising ROAS can mean you are shrinking.
The easiest way to improve ROAS is to spend less, because the cheapest clicks are usually the ones from people already looking for you. Cut the budget to the warmest audience and the ratio climbs beautifully while total profit falls. If you only ever optimise the ratio, you will optimise your way down to one very efficient campaign and no growth.
Judge the ratio against break-even. Judge the business on total profit.
Where I stand on ad spend
Ad spend goes straight to the platform.
I do not take a percentage of what you spend with Google or Meta, and nothing is marked up. Management is a published monthly price, which means my income does not go up when your budget does. It is one less thing you have to take on trust, and it is the reason the fee field above exists.
Use this calculator elsewhere
Linking to it is welcome.
If you are writing about return on ad spend and want to point readers at a calculator that accounts for margin and management fees, use this. No attribution rules, no permission needed.
<a href="https://socialbytaniya.com/resources/roas-calculator/">ROAS calculator with break-even and target ROAS</a>
Plain text version: ROAS calculator with break-even and target ROAS, socialbytaniya.com/resources/roas-calculator/
Working out what a customer costs rather than what an ad returns? The CAC calculator does acquisition cost, lifetime value and payback period.
Common questions
What is a good ROAS?
There is no single good number, because it depends entirely on your gross margin. Break-even ROAS is 1 divided by your gross margin: 1.43x at 70 percent margin, 2.00x at 50 percent, 3.33x at 30 percent, 5.00x at 20 percent. A 4x ROAS is strong for a service business and a loss for a low margin retailer. Work out your break-even first, then judge everything against that.
How do you calculate ROAS?
Revenue attributed to the ads divided by what you spent on them. $8,000 of revenue from $2,000 of spend is a 4.00x ROAS. It is usually written as a multiple rather than a percentage, though some platforms show 400 percent, which means the same thing.
What is break-even ROAS?
The ROAS at which the ads exactly pay for themselves and produce no profit. It is 1 divided by your gross margin expressed as a decimal. At 40 percent margin that is 1 divided by 0.4, which is 2.50x. Below that figure every additional sale the ads generate costs you money, no matter how healthy the raw ROAS looks.
Should I include my agency fee in the calculation?
Yes. The management fee is paid out of the same gross profit the ads produce, so leaving it out makes the campaign look better than it is. A 15 percent of spend arrangement moves your break-even up by roughly that proportion. The calculator above takes a percentage or a flat fee and shows both figures so you can see the gap.
What is target ROAS and how do I set one?
Target ROAS is the return you need to hit a profit goal, rather than just to break even. Take the profit you want, add your ad spend and any management fee, divide by your gross margin to get the revenue required, then divide that by your spend. At 60 percent margin on $2,000 of spend, wanting $2,800 of profit gives a target of 4.00x. Set it after you know your break-even, never before: a target that is not anchored to break-even is a wish rather than a plan.
Is ROAS the same as ROI?
No, and confusing them is expensive. ROAS compares revenue to ad spend only. ROI compares profit to total cost, which includes the cost of delivering what you sold, your management fee, and everything else. A campaign can have a good ROAS and a negative ROI at the same time, which is what the break-even figure in this calculator is there to catch.
Do you store what I type in?
No. The calculation runs entirely in your browser, nothing is sent anywhere, and nothing is saved. No email is required and there is no gate.
My ROAS looks great but the bank account disagrees. Why?
Three usual causes, in the order worth checking. The tracking is over-counting, which you test by submitting a real purchase or enquiry and confirming what gets recorded. The margin assumption is too generous, often because delivery, payment fees or returns were left out. Or the ratio is healthy on a budget too small to matter, which is the one that feels best and does the least.
If the numbers do not add up
The problem is usually not the campaign.
Most of the time a bad ROAS is a tracking problem, an offer problem or a landing page problem wearing a campaign's clothes. I will look at your website, your tracking and how you show up in search, and tell you plainly which one it is. Written findings in five business days.