Break-Even ROAS Calculator
Find the return on ad spend you need before ads stop losing money. Enter price, VAT, product cost, shipping and fees for one product or a whole mix, and get break-even ROAS, break-even ACoS and the ROAS that reaches your target margin.
Written by Suhaib Hassan. Formulas follow standard contribution-margin accounting. Our methodology.
It removes VAT, subtracts every cost per sale, then divides the price by the profit left for ads.
Ad platforms show revenue, not profit. This shows the ROAS where an ad pays for itself.
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Results by product
Each product's own break-even ROAS, ACoS and target ROAS, before blending.
| Product | Net revenue | Costs | Profit before ads | Break-even ROAS | Break-even ACoS | Target ROAS |
|---|
ROAS and ACoS
Profit before ads
P = price ÷ (1 + VAT) − costsBreak-even ROAS
price ÷ P = 1 ÷ margin before adsBreak-even ACoS
P ÷ price = 1 ÷ ROASTarget ROAS
price ÷ (P − target margin × net revenue)Where the number goes wrong
Ad platforms report revenue with VAT included, so working from the net price makes break-even look easier than it is. Returns, discounts and free shipping also cut the profit you keep, so put them in the cost fields.
Break-even ROAS covers per-sale costs only. Fixed costs such as salaries and software need the Break-Even Calculator as well.
Worked examples
Illustrative figures, each checked by hand. The first is the default product.
One product
Price $60 including 20% VAT, product cost $14, shipping $5, 3% payment fee, $1 other.
costs = 14 + 5 + 1 + (0.03 × 60 = 1.80) = 21.80
profit before ads = 50 − 21.80 = 28.20
break-even ROAS = 60 ÷ 28.20 = 2.13, ACoS = 47.0%
With a 10% target margin
Same product, keeping 10% of net revenue as profit.
target ROAS = 60 ÷ 23.20 = 2.59, ACoS = 38.7%
Two products blended
Product A as above (100 units) and Product B at $30, cost $8, shipping $4, 3% fee (200 units).
revenue = 6,000 + 6,000 = 12,000
profit before ads = 2,820 + 2,420 = 5,240
blended ROAS = 12,000 ÷ 5,240 = 2.29
How to find your break-even ROAS
- Take the selling price the customer pays, including VAT or sales tax.
- Remove the tax to get net revenue, then subtract product cost, shipping, payment fees and any other cost per sale.
- Divide the selling price by the profit that is left. That is your break-even ROAS.
- Run campaigns above that number. Raise it to the target ROAS if you also want a set profit margin.
If profit before ads is zero or negative, no ROAS breaks even. Raise the price or cut costs first.
By Suhaib Hassan · Reviewed 18 October 2026 · How CalculatePilot verifies formulas →
Sources
- Garrison, Noreen and Brewer, Managerial Accounting, chapter on cost-volume-profit relationships.
- Horngren, Datar and Rajan, Cost Accounting: A Managerial Emphasis.
Break-even ROAS by margin
Break-even ROAS is 1 ÷ the margin you keep before ads. The thinner the margin, the higher the ROAS you need.
| Margin before ads | Break-even ROAS | Break-even ACoS |
|---|---|---|
| 20% | 5.00 | 20% |
| 25% | 4.00 | 25% |
| 33.3% | 3.00 | 33.3% |
| 40% | 2.50 | 40% |
| 50% | 2.00 | 50% |
| 66.7% | 1.50 | 66.7% |
ROAS, ACoS and CPA
ROAS is revenue ÷ ad spend. ACoS is ad spend ÷ revenue, so ACoS = 1 ÷ ROAS. Cost per acquisition (CPA) is ad spend ÷ sales, and your break-even CPA equals the profit before ads on one sale, here $28.20.
Frequently asked questions
What is break-even ROAS?
It is the return on ad spend at which an ad earns back exactly what it cost. Break-even ROAS = selling price ÷ profit per sale before ads, which is the same as 1 ÷ the profit margin before ads. A product with a $60 price and $28.20 profit before ads breaks even at a ROAS of 2.13.
How do I calculate break-even ROAS?
Work out the profit per sale before ads: net revenue after VAT, minus product cost, shipping, payment fees and other costs. Then divide the selling price by that profit. If a $60 sale leaves $28.20 before ads, break-even ROAS is 60 ÷ 28.20 = 2.13.
What is break-even ACoS and how does it relate to ROAS?
ACoS (advertising cost of sales) is ad spend divided by sales, so it is 1 ÷ ROAS. Break-even ACoS is the highest ACoS you can run without losing money. A break-even ROAS of 2.13 is a break-even ACoS of 47.0%.
Should the selling price include VAT?
Yes, enter the price the customer pays, because ad platforms report revenue with VAT or sales tax included. The calculator removes the tax before working out your profit, so your ROAS target is not overstated. Set the VAT rate to 0 if you do not charge tax.
What is a good ROAS?
There is no single good number, because it depends on your margin. A 20% margin before ads needs ROAS 5.00 just to break even, while a 50% margin needs only 2.00. A good ROAS is one comfortably above your own break-even ROAS.
How is target ROAS different from break-even ROAS?
Break-even ROAS only covers costs. Target ROAS also leaves the profit you want: it takes the profit before ads, subtracts your target margin on net revenue, and divides the price by what is left for ad spend. A 10% target margin raises the example product from ROAS 2.13 to 2.59.
How do I work out ROAS for several products?
Add each product with its own price, costs and units sold. The calculator blends them by units, so the combined ROAS is total revenue ÷ total profit before ads. Use it for a campaign that promotes a mix of products, then check each product's own ROAS in the table.
Do returns and refunds change break-even ROAS?
They do. Returns lower the revenue you keep, so the real profit per sale is smaller than the listed price suggests. Add the average return cost per sale to the Other cost per unit field to include it.
Does a ROAS above break-even always mean the ads are worth running?
Not always. It means each sale covers its own costs and ad spend, but it ignores fixed costs such as salaries, software and rent. Use the Break-Even Calculator to see how many sales you need to cover those as well.
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