Break-Even ROAS Calculator

Use the free Break-Even ROAS Calculator to determine the minimum return on ad spend your advertising needs to generate before it becomes profitable. Enter your selling price, product cost, and other variable expenses to calculate your contribution margin, maximum allowable ad spend, and break-even ROAS.

Enter Your Unit Economics

Selling Price / Revenue per Order

$

Enter the average revenue generated from one order.

Product Cost / COGS

$

Enter the direct cost of the product or service sold.

Other Variable Costs

$

Include transaction fees, shipping, fulfillment, commissions, or other costs tied directly to each sale.

Your Results

Total Variable Costs —

Contribution Profit Before Ads —

Contribution Margin —

Maximum Ad Spend per Order —

Break-Even ROAS —

Break-even ROAS represents the advertising return at which your contribution profit is fully consumed by ad spend. Results are estimates and do not account for every possible business expense.

How to Calculate Break-Even ROAS

Break-even ROAS is the return on ad spend at which advertising revenue covers both your advertising expense and the variable costs associated with the sale.

A simple formula is:

Break-Even ROAS = 1 ÷ Contribution Margin

For example, if your contribution margin is 50%:

1 ÷ 0.50 = 2.00

Your break-even ROAS is therefore 2.00x.

A ROAS above 2.00x would generate contribution profit, while a ROAS below 2.00x would result in a loss based on those costs.

Why Your Margin Affects Break-Even ROAS

Businesses with higher margins can generally afford to spend more on advertising.

For example:

50% contribution margin → 2.00x break-even ROAS

40% contribution margin → 2.50x break-even ROAS

25% contribution margin → 4.00x break-even ROAS

Lower-margin products require a higher advertising return because less revenue remains available to cover ad spend.

ROAS vs. Profit

A positive ROAS does not automatically mean an advertising campaign is profitable.

A campaign generating 2x ROAS means that every $1 of advertising produced $2 in revenue. Whether that is profitable depends on the costs associated with generating that revenue.

Product costs, shipping, payment processing fees, fulfillment costs, and other variable expenses all reduce the amount available to pay for advertising.

That is why break-even ROAS provides more useful context than ROAS alone.