Skip to content
Log inStart free

ROAS calculator: calculate return on ad spend and break-even ROAS

ROAS (return on ad spend) is revenue from ads divided by ad spend: $12,000 of revenue on $3,000 of spend is a 4.00x ROAS. Your break-even ROAS is 1 divided by your gross margin, so at a 40% margin you need at least 2.50x before the ads pay for themselves.

$
$
%

Price minus product, shipping and fees, as a % of price.

$

What you aim to pay for one order.

ROAS 4.00x is above your break-even ROAS of 2.50x: these ads pay for themselves.

ROAS4.00xrevenue ÷ ad spend
Break-even ROAS2.50x1 ÷ gross margin
Profit after ad spend$1,800.00revenue × margin − ad spend

Profit here is before fixed costs (rent, salaries, software). The math runs in your browser.

What is the ROAS formula?

ROAS (return on ad spend) is the revenue your ads brought in divided by what you paid for them. It tells you how many dollars came back for each dollar of ads. A 4.00x ROAS means $4 of revenue for every $1 spent.

ROAS

ROAS = revenue from ads ÷ ad spend

Break-even ROAS is the ROAS at which ads pay for themselves and nothing more. It only depends on your gross margin: the share of each sale left after the product, shipping and payment fees.

Break-even ROAS

Break-even ROAS = 1 ÷ gross marginAt a 40% margin: 1 ÷ 0.40 = 2.50x.

ROAS calculation examples

Three stores, same formula
StoreRevenueAd spendROASMarginBreak-even ROASResult
Skincare$12,000$3,0004.00x40%2.50xProfitable: $1,800 left after ads
Electronics$9,000$3,0003.00x20%5.00xLosing: $1,200 short after ads
Digital course$4,500$3,0001.50x90%1.11xProfitable: $1,050 left after ads

The same 3.00x ROAS can be great or terrible. What matters is the gap between your ROAS and your break-even ROAS, which is why the calculator asks for your margin.

How does a target CPA fit in?

CPA (cost per acquisition) is ad spend divided by orders. If you aim to pay $25 per order at a 40% margin, each order has to be worth at least $25 ÷ 0.40 = $62.50 for the ads to break even. Below that order value, the CPA target is too high for your margin.

Why your platform ROAS can differ from your bank account

  • Attribution windows: each platform counts a purchase that happens within its own window after a click or a view, so one sale can show up in more than one platform's ROAS.
  • Cash on delivery: a purchase event is an order placed, not an order paid. Refused or returned parcels never become revenue.
  • Refunds and discounts come after the purchase event is reported.
  • For the full picture, read our ROAS formula guide, then why ROAS drops. Tempomat reads these numbers straight from your ad platforms and stores (features).

Questions

What is a good ROAS?

A good ROAS is any ROAS above your break-even ROAS, which is 1 divided by your gross margin. At a 50% margin you break even at 2.00x; at a 25% margin you need 4.00x.

How do I calculate break-even ROAS?

Divide 1 by your gross margin as a decimal. A 40% margin gives 1 ÷ 0.40 = 2.50x. Any ROAS above that leaves money after ad spend.

Is ROAS the same as ROI?

No. ROAS divides revenue by ad spend only. ROI divides profit by the total investment, so it subtracts product costs, fees and other expenses first.

Does ROAS include product costs?

No. ROAS uses revenue, not profit. That is why you compare it with your break-even ROAS, which brings your margin in.

See ROAS for every campaign, from the API

Tempomat pulls spend and revenue from Meta, TikTok, Google Ads and your store, and answers "why did ROAS drop?" in plain English.

Start your 7-day free trial