How do I calculate break-even ROAS?

Break-even ROAS = average order value ÷ profit per order before ads. Profit before ads is the order value minus VAT, refunds, payment fees, product, shipping and other costs. A £50 order with £20.17 left before ads has a break-even ROAS of 50 ÷ 20.17 = 2.48.

ROAS (return on ad spend) is the revenue your ads bring in divided by what you spent on them. £5,000 of sales from £1,000 of ads is a ROAS of 5, often written 5x or 500%.

What is break-even ROAS?

Break-even ROAS is the ROAS where an order pays back its ad cost and nothing more. Below it you lose money on each order, above it you make a profit.

Is there a quick break-even ROAS formula from margin?

Yes. Break-even ROAS = 1 ÷ margin before ads, where margin is measured against the order value your ad platform reports. A 25% margin needs a ROAS of 4, a 40% margin needs 2.5 and a 50% margin needs 2.

How do I set a target ROAS for Google Ads?

Decide the profit you want after ads as a share of order value, then target ROAS = 1 ÷ (margin before ads − profit you want). With a 40% margin and a 10% profit goal, target ROAS is 1 ÷ 0.30 = 3.33, or 333% in Google Ads.

Why does VAT matter for ROAS?

Google Ads and Meta usually report revenue including VAT, but VAT is not your money. If you are VAT registered your break-even ROAS is higher than it looks, which this calculator takes into account.

What is a good ROAS for ecommerce?

There is no single number. A good ROAS is one comfortably above your own break-even ROAS. A brand with a 60% margin can grow at a ROAS of 2.5, while a brand with a 25% margin may need 5 or more just to break even.

What is the difference between ROAS and POAS?

ROAS measures revenue per £1 of ads. POAS (profit on ad spend) measures profit per £1 of ads, so it accounts for different margins across products. A POAS above 1 means the ads made money.

Can I run ads below break-even ROAS?

Sometimes, if new customers buy again. Then you can judge first orders against lifetime value rather than one order. Do it on purpose and with a limit, not by accident.

Free tool

Free ROAS and Breakeven ROAS Calculator

Find out the ROAS your Google and Meta ads need to break even after VAT, product costs, shipping and fees, and whether your current ROAS is making you money. No sign-up.

By Anthony McGrath · Updated 16 October 2026

Your numbers

Average order value

What the customer pays, as your ads report it.

Product cost per order

Shipping and packaging

I'm VAT registered (order value includes VAT)

Optional tweaks: fees, other costs, VAT rate, returnsOptional

The calculator works with the three boxes above. Add these for a more exact answer.

Other costs per order

Apps, pick and pack, inserts.

Payment fee

Plus per order

VAT rate

Returns and refunds

Profit you want after ads

As a share of order value. Gives your target ROAS.

Your results

Estimates for planning, based on the numbers you enter. Nothing you type leaves your browser.