Break-Even ROAS Calculator: Formula, Margin and Max CPA
Enter one average order and the costs that come with it, or a single margin. You get the contribution margin, the break-even ROAS where ads stop losing money, the ROAS that leaves the profit share you want, and the most one order can cost in ads.
Calculate Your Break-Even ROAS
The form holds a worked example: a $150 order with $63 of product cost, $18 of shipping and fulfillment, 3% payment fees, $10.50 of other variable costs and a 10% profit share. Replace it with your numbers; the results update as you type.
Want us to check which campaigns clear your break-even?
The formula
Break-Even ROAS Formula With a Worked Example
Break-even ROAS is the return on ad spend at which ads pay for themselves and nothing more. The formula is 1 ÷ contribution margin, so the whole result rests on getting the margin right, and the margin comes from one order and the costs it brings with it.
Worked example. A $150 order carries $63 of product cost, $18 of shipping and fulfillment, $4.50 of payment fees (3%) and $10.50 of other variable costs, such as a returns allowance and packaging. That is $96 of costs, which leaves $54. Divided by $150, the contribution margin is 36%.
Break-even ROAS is 1 ÷ 0.36 = 2.78x: every $1 of ad spend has to bring back $2.78 of revenue before the ads earn anything. Read per order, the same line says one order can cost at most $54 in ads. That is the max CPA at break-even, and $150 ÷ $54 gives the same 2.78x.
To keep a profit, take the share you want off the margin first. Keep 10% of revenue and the ads may use 26%, so the ROAS needed is 1 ÷ 0.26 = 3.85x and one order can cost $39 in ads. Our guide to the ROAS formula explains ROAS itself, and what is a good ROAS sets break-even against published benchmarks.
order value - cost of goods - shipping and fulfillment - payment fees - other variable costs$150 - $63 - $18 - $4.50 - $10.50 = $54.00contribution margin ÷ order value$54 ÷ $150 = 36.00%1 ÷ contribution margin1 ÷ 0.36 = 2.78x1 ÷ (contribution margin - profit share)1 ÷ (0.36 - 0.10) = 3.85xorder value × contribution margin$150 × 0.36 = $54.00order value × (contribution margin - profit share)$150 × 0.26 = $39.00By margin
Break-Even ROAS by Margin
Find your contribution margin in the first column. The second column is where ads stop losing money, the third is the same number as the percentage Google Ads asks for, and the fourth is the ROAS that keeps 10% of revenue as profit.
| Margin | Break-even ROAS | Target ROAS % | For 10% profit |
|---|---|---|---|
| 10% | 10.00x | 1000% | None |
| 15% | 6.67x | 667% | 20.00x |
| 20% | 5.00x | 500% | 10.00x |
| 25% | 4.00x | 400% | 6.67x |
| 30% | 3.33x | 333% | 5.00x |
| 36% | 2.78x | 278% | 3.85x |
| 40% | 2.50x | 250% | 3.33x |
| 50% | 2.00x | 200% | 2.50x |
| 60% | 1.67x | 167% | 2.00x |
| 70% | 1.43x | 143% | 1.67x |
Margin moves break-even faster than bids do. A campaign that earns 4.00x loses money at a 20% margin, where break-even is 5.00x, and makes money at 30%, where it is 3.33x. At a 10% margin a 10% profit share leaves nothing for ads, so no ROAS reaches it. Max CPA reads straight off the first column: on a $100 order it equals the margin, so a 36% margin allows $36 of ads per order. The markup calculator shows how a price change moves the margin.
What goes in
What Counts as a Variable Cost
A cost belongs in the margin when it grows with every order. These six lines decide whether the break-even is honest.
Cost of goods
The landed cost of what is in the box: the product, inbound freight and duties. For bundles and multi-item orders, use the cost of the average order, not of one unit.
Shipping and fulfillment
What you pay, not what you charge. Free shipping is a cost of the order; shipping the person pays for is revenue and belongs in the order value. Pick, pack and warehouse fees go here too.
Payment fees
Card processing on the whole order, usually a percentage plus a fixed amount per transaction. The calculator takes the percentage; add the fixed cents to other variable costs.
Returns and refunds
Averaged over every order. A 5% returns rate on a $150 order is $7.50 per order, and more when a returned item cannot be sold again at full price.
Packaging and per-order apps
Boxes, mailers and inserts, plus any app or service billed per order rather than per month. Our Shopify profit margin calculator itemizes these for one order.
Fixed costs stay out
Rent, salaries, subscriptions and a monthly management fee do not grow with each order. They are paid from what the ads earn above break-even, which is what the profit share is for.
Watch for
When One Break-Even Number Misleads
Break-even ROAS is exact for the order you enter. Three cases where an account needs more than one number.
One break-even for a catalog with mixed margins
A store that sells a 60% margin accessory and a 20% margin flagship has break-evens of 1.67x and 5.00x. A single blended target lets the ads overspend on the flagship and hold back on the accessory.
Break-even per margin band
Group products into a few margin bands and give each band its own campaign or asset group and its own target. Our eCommerce Google Ads builds start from this split, and the Google Shopping ads guide shows the structure.
A sale lowers the margin
A 20% discount takes $30 off the $150 order and almost nothing off its costs. In the example the margin falls from 36% to 20.75%, and break-even rises from 2.78x to 4.82x.
Recalculate at the sale price
Run the calculator at the discounted order value before the sale starts, and raise the target for the sale period. Our Black Friday Google Ads checklist covers when to change targets around a sale.
Repeat orders left out
Break-even on the first order treats every new client as a single sale. A product people reorder every month can pay back its ad cost over several orders, so a first-order break-even can hold back profitable growth.
Decide what a first order may cost
Work out lifetime profit with the LTV calculator and choose how much of it you will spend to win the first order. Track new and returning revenue apart, so returning orders do not flatter the first-order ROAS.
In the account
How to Use Break-Even ROAS in Google Ads
Three places the number goes once it leaves the calculator.
Compare each campaign with it
Take 30 days or more of conversion value and cost from the same date range, and divide. Campaigns above break-even pay for themselves; campaigns below it lose money on every sale, however good the ROAS looks next to someone else's average.
Enter Target ROAS as a percentage
Google Ads Help shows $5 of sales for each $1 of ad spend as a 500% target ROAS. Break-even 2.78x is 278%, and the 10% profit target is 385%. Google lists at least 15 conversions in the past 30 days for Search and Shopping campaigns. Our Target ROAS guide covers the rollout.
Use max CPA when conversions carry no value
If the account counts purchases without values, Target CPA asks for the average cost per conversion you want. The max CPA at your profit share, $39 in the example, is that number, and the $54 break-even is the ceiling.
What is break-even ROAS?
Break-even ROAS is the return on ad spend at which ads pay for themselves and nothing more: what the sales leave after product and order costs equals what the ads cost. Below it every sale from ads loses money; above it the ads earn. It comes from your own contribution margin, not from an industry average.
How does the break-even ROAS formula work?
Break-even ROAS = 1 ÷ contribution margin, with the margin as a decimal. Contribution margin = (order value - cost of goods - shipping and fulfillment - payment fees - other variable costs) ÷ order value. A $150 order that leaves $54 has a 36% margin, so break-even ROAS is 1 ÷ 0.36 = 2.78x.
How do I calculate break-even ROAS?
Take one average order, subtract every cost that comes with it (product, shipping and fulfillment, payment fees, returns and packaging), divide what is left by the order value, then divide 1 by that margin. In the example $150 - $96 = $54, $54 ÷ $150 = 36%, and 1 ÷ 0.36 = 2.78x. The calculator on this page does the same steps.
What is the difference between break-even ROAS and target ROAS?
Break-even ROAS leaves zero profit. A target ROAS adds the profit you want to keep: 1 ÷ (margin - profit share). At a 36% margin and a 10% profit share that is 1 ÷ 0.26 = 3.85x. Google Ads takes the target as a percentage, so 3.85x is entered as 385%.
How is max CPA related to break-even ROAS?
They describe the same line from two sides. Max CPA at break-even is order value × contribution margin, the most one order can cost in ads: $150 × 0.36 = $54. Divide the order value by it and you get break-even ROAS: $150 ÷ $54 = 2.78x. Use max CPA when your conversions carry no value, and break-even ROAS when they do.
Should fixed costs go into break-even ROAS?
No. Rent, salaries, software and a monthly management fee do not grow with each order, so they stay out of the margin. They are paid from what the ads earn above break-even, which is what the profit share is for. Putting them into the margin makes break-even depend on order volume and turns one number into a moving target.
Does the calculator store my numbers?
No. The math runs in your browser, and nothing you type is sent to us or saved anywhere.
Free audit
Want Us to Check Your Campaigns Against Break-Even?
Send us the account and the margin you worked out. We tell you whether we found what is keeping campaigns below break-even and name one or two issues before any work starts.
- Google Partner agency
- Shopify Partner
- No obligation
Sources
Sources and Related Pages
- Google Ads Help, About Target ROAS bidding: support.google.com/google-ads/answer/6268637. Target ROAS as a percentage ($5 in sales ÷ $1 in ad spend × 100% = 500%); at least 15 conversions in the past 30 days for Search and Shopping campaigns. Read November 10, 2026.
- Google Ads Help, About Target CPA bidding: support.google.com/google-ads/answer/6268632. With Target CPA you set your desired average cost per conversion; conversion tracking must be set up first. Read November 10, 2026.
- Logical Gecko, ROAS Formula: How to Calculate ROAS and Break-Even ROAS.
- Logical Gecko, What Is a Good ROAS? Benchmarks by Profit Margin.
- Logical Gecko, Target ROAS in Google Ads: The Practical 2026 Guide.