Break-Even ROAS Calculator
Work out the ROAS you need just to break even
Break-even ROAS calculator FAQs
What does this break-even ROAS calculator show?
This calculator converts your gross margin and variable cost percentage into a simple break-even ROAS number. It tells you the minimum return on ad spend you need so that ad costs exactly absorb your available margin, with no profit and no loss on that traffic.
How should I choose my gross margin percentage?
Use the percentage of revenue left after COGS or delivery costs. For ecommerce, include product, packaging, and pick-and-pack costs. For digital products or SaaS, gross margins are usually higher, so plug in the real blended margin your finance or accounting reports already use.
What counts as extra variable costs of revenue?
Extra variable costs are expenses that scale with sales volume. Typical examples are payment processing fees, fulfillment and 3PL surcharges, sales commissions, and usage-based app or platform fees. Fixed costs like salaries or rent generally should not go here unless you have already converted them into a per-revenue percentage.
Why does break-even ROAS not depend on currency?
ROAS is revenue ÷ ad spend, so it is a ratio. When you express margin and variable costs as percentages of revenue, the underlying currency cancels out. That means the break-even ROAS you see here applies in USD, EUR, GBP, or any other currency as long as the percentages are correct.
How can I use break-even ROAS in campaign planning?
Use break-even ROAS as a hard floor for testing and scaling. Campaigns that sit below this number are losing money before fixed costs. Campaigns that sit just above it are fragile and may turn unprofitable once refunds or discounts are considered. Ideally you set target ROAS levels above break-even to lock in the net profit margin your business needs.
Is this a replacement for a full P&L or tax advice?
No. This break-even ROAS calculator is a quick planning tool for marketers and operators. It ignores fixed costs, lifetime value, and advanced accounting treatment. For budgeting, tax, and full P&L analysis, work with your finance team or advisor.
How to use this break-even ROAS calculator
The break-even ROAS calculator is designed to be fast and minimal. Instead of asking for dozens of inputs, it focuses on the two numbers that really matter: your gross margin after product costs and your extra variable costs as a percentage of revenue. From there it reveals the ROAS you must hit so that ad spend exactly matches the margin available to pay for it.
1. Add your gross margin after product costs
Start by entering the gross margin percentage your finance team already uses. If you sell physical products, that is usually revenue minus the landed cost of goods, packaging, and basic fulfillment. For digital products, training, or software, margin is often much higher, but it still needs to reflect the real cost of delivering the offer at scale.
2. Enter extra variable costs as % of revenue
Next, enter any variable costs that rise with each order as a percentage of revenue. Payment gateway fees, 3PL surcharges, revenue-share partners, and usage-based apps are common examples. If you are not sure, start at 0% and add items gradually as you map out your cost structure.
3. Read your break-even ROAS and ad spend ceiling
When you hit Calculate, the summary shows a single break-even ROAS number, the maximum share of revenue you can safely spend on ads, and an example ad budget per $100 of revenue. These outputs make it easy to translate slow-moving margin spreadsheets into concrete ROAS guardrails you can use inside your ad platforms.
Use this calculator whenever you launch a new offer, change pricing, or evaluate a new channel. Once you know your break-even ROAS, you can set realistic target ROAS bands above that floor so paid traffic growth stays aligned with profitability instead of just chasing cheap clicks.
How the break-even ROAS math works
The calculator uses a simple percentage-based model. Let g be your gross margin after product costs as a decimal (for example 0.6 for 60%), and e be your extra variable costs as a decimal (for example 0.1 for 10%). Net margin available to pay for ads is:
Net margin for ads = g − e
At break-even, your ad spend uses all of this net margin. If R is your ROAS (revenue ÷ ad spend), then ad spend as a fraction of revenue is 1 ÷ R. Setting that equal to the net margin available for ads gives:
1 ÷ R = g − e
Solving for R yields the break-even ROAS:
Break-even ROAS = 1 ÷ (g − e)
If you prefer to think in dollars, multiply the net margin for ads by 100 to get the maximum ad budget per $100 of revenue. If the net margin for ads is 0.4 (40%), you can spend up to $40 on ads for every $100 in tracked revenue before you start losing money on that traffic.
The model deliberately ignores fixed costs, seasonality, refunds, and attribution noise so you have a clean baseline. You can then layer your own safety buffers on top, choosing ROAS targets that sit comfortably above the break-even number given by this tool.
Break-even ROAS and marketing profitability references
- Google Ads Help Center – Official documentation on ROAS, conversion value, and value-based bidding strategies.
- Meta Business Help Center – Guidance on measuring return on ad spend and optimizing campaigns for profitability.