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ROAS Calculator With Break-Even and Target ROAS
Enter revenue from ads, ad spend, your contribution margin and your monthly management fee. You get your ROAS, the break-even ROAS your margin allows, break-even with the fee included, the target ROAS that leaves the profit you want, and the profit or loss at your numbers. The math runs in your browser and nothing you type is sent to us.
Calculator
Calculate Your ROAS and Break-Even ROAS
The form holds a worked example: $20,000 of revenue from $5,000 of spend at a 35% margin, with a $1,000 fee and a 10% profit target. Replace it with your numbers; the results update as you type.
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The math
What ROAS Is and Where Break-Even Comes From
ROAS, return on ad spend, is revenue from ads divided by ad spend: $20,000 of revenue from $5,000 of spend is a 4.00x ROAS, also written 400% or 4:1.
ROAS says nothing about profit until you know your margin. Break-even ROAS is 1 divided by your contribution margin. At a 35% margin every $1 of revenue leaves 35 cents to pay for the ads, so you need $2.86 of revenue per $1 of spend to come out even.
A management fee raises the bar. Add it to the spend before dividing: ($5,000 + $1,000) ÷ $5,000 is 1.2, and 1.2 ÷ 0.35 is 3.43x.
Target ROAS adds the profit you want. Take the share of revenue you want to keep (10%) off the margin, so the ads may use 25% of revenue at most: 1.2 ÷ 0.25 is 4.80x. Our guides go deeper on the ROAS formula and on ROAS vs ROI.
revenue from ads ÷ ad spend$20,000 ÷ $5,000 = 4.00x1 ÷ contribution margin1 ÷ 0.35 = 2.86x(1 + fee ÷ ad spend) ÷ contribution margin(1 + 1,000 ÷ 5,000) ÷ 0.35 = 3.43x(1 + fee ÷ ad spend) ÷ (margin - desired profit share)1.2 ÷ (0.35 - 0.10) = 4.80xrevenue × margin - ad spend - fee$20,000 × 0.35 - $5,000 - $1,000 = $1,000By margin
Break-Even and Target ROAS by Margin
No management fee and a 10% profit target. The lower the margin, the higher the ROAS an ad needs before it earns anything.
| Contribution margin | Break-even ROAS (1 ÷ margin) | Target ROAS for 10% profit (1 ÷ (margin - 0.10)) |
|---|---|---|
| 25% | 4.00x | 6.67x |
| 35% | 2.86x | 4.00x |
| 45% | 2.22x | 2.86x |
| 55% | 1.82x | 2.22x |
How to find your contribution margin. It is what is left of the price after product cost, the shipping you pay, packaging, payment processing and returns, before any ad spend. Price minus product cost overstates it. Our Shopify profit margin calculator works it out from one order; the worked example there lands at 48.35%, a 2.07x break-even.
Use the number
How to Use Break-Even and Target ROAS
Three rules that keep the number honest once it leaves the calculator.
Put the management fee in
An agency or software fee is a cost of the channel. At $5,000 of spend a $1,000 fee adds 20%, which moves break-even from 2.86x to 3.43x. At $20,000 of spend the same fee adds 5%, so the gap closes as spend grows. Google Ads cannot see the fee, so its reported ROAS never includes it.
Set Target ROAS from it
Google Ads asks for Target ROAS as a percentage, so 4.80x is 480%. Google Ads Help lists at least 15 conversions in the past 30 days for Search and Shopping campaigns before Target ROAS can be used, and each conversion must carry a value above zero. Start near the ROAS the campaign already earns and move toward the target in steps. Our Target ROAS guide covers the rollout.
Ignore the industry average
A published average mixes stores with 20% margins and stores with 60% margins. The same 4x ROAS is a 20% loss at a 20% margin and a 100% return at a 50% margin. The only ROAS worth comparing against is your own break-even, which is why the calculator asks for your margin and not your category.
Common mistakes
Where ROAS Math Goes Wrong
Six habits that make a ROAS look better than the bank balance.
- Platform ROAS read as blended ROAS. Google Ads reports the revenue it attributes to its own clicks. Blended ROAS divides total store revenue by total marketing spend. Compare each with its own break-even and never swap one for the other.
- Repeat orders counted as new. A branded campaign that brings back someone who would have ordered anyway inflates ROAS. Split new from returning revenue in your store before trusting a high number.
- Returns left out of the margin. A 4% returns rate on an $80 order takes $3.20 off every order on average. Returns, refunds and discounts come off before the margin goes into the calculator.
- Gross margin used instead of contribution margin. Price minus product cost ignores shipping, packaging and card fees, so the break-even that comes out is too low and approves ads that lose money.
- Revenue and spend from different windows. Conversion lag means part of this week's revenue came from earlier clicks. Use the same date range for both, and 30 days or more so one large order does not move the result.
- The target set by feel. A target ROAS is a margin and a profit goal written as one number. Change the goal and the target moves; change the fee and the break-even moves. Recalculate when either changes.
What is a good ROAS?
A good ROAS is above your break-even with the fee included, and at or above the target that leaves the profit you want. At a 35% margin with no fee that means above 2.86x; with a $1,000 fee on $5,000 of spend it means above 3.43x. An average from another store says nothing about yours, because its margin is different.
What is the break-even ROAS formula?
Break-even ROAS is 1 divided by contribution margin. It is the ROAS at which the ads make neither profit nor loss. A 35% margin gives 1 ÷ 0.35 = 2.86x, a 25% margin gives 4.00x, and a 55% margin gives 1.82x. Add a management fee by multiplying by (1 + fee ÷ ad spend).
Should the agency fee be part of ROAS?
Google Ads cannot see your fee, so the ROAS it reports leaves it out. For your own decision, put it in: add the fee to the spend, which is what the break-even with fee and target lines above do. On $5,000 of spend a $1,000 fee lifts break-even from 2.86x to 3.43x.
How do I turn the target into a Target ROAS setting in Google Ads?
Google Ads takes the target as a percentage, so 4.80x is 480%. Google Ads Help lists at least 15 conversions in the past 30 days for Search and Shopping campaigns before Target ROAS bidding can be used, with a value above zero on every conversion. Start near the ROAS the campaign already earns and move toward the target in steps.
Which margin do I enter?
Contribution margin: the share of revenue left after product cost, the shipping you pay, packaging, payment processing and returns, before ad spend. Price minus product cost is too high. The Shopify profit margin calculator works it out from one order.
Does the calculator store my numbers?
No. The math runs in your browser, and nothing you type is sent to us or saved anywhere.
Can you check whether my account reaches these numbers?
Yes. A free Google Ads audit looks at the account behind the numbers. We tell you whether we found what is holding ROAS back and name one or two issues; the full list and the fixes are part of management.
Free audit
Want Us to Check the Account Behind These Numbers?
Send us the account and the margin you entered. We tell you whether we found what is holding ROAS back and name one or two issues before any work starts.
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Sources
Sources and Related Pages
- Google Ads Help, About Target ROAS bidding: support.google.com/google-ads/answer/6268637. Requirements: at least 15 conversions in the past 30 days for Search and Shopping campaigns, with conversion values above zero. Checked October 2026.
- Logical Gecko, ROAS Formula: How to Calculate ROAS and Break-Even ROAS.
- Logical Gecko, ROAS vs ROI: Formulas, Examples and Which to Use.
- Logical Gecko, Target ROAS in Google Ads: The Practical 2026 Guide.