ROAS Calculator (With Break-Even and Target ROAS)

How to use this ROAS calculator

1. On the ROAS tab, enter what you spent on ads and the revenue those ads brought in. You get your ROAS and ACoS.
2. On the Break-even and target ROAS tab, enter your selling price (or average order value), product cost and any shipping, fees, other costs and returns. You get your break-even ROAS and the most you can pay for one sale.
3. Add a target profit margin to see the ROAS you need to hit that profit.
4. Click "Use this break-even in the ROAS tab" to see straight away whether your ads make money.

What is ROAS?

ROAS (return on ad spend) shows how much revenue you earn for every dollar you spend on ads. A ROAS of 4 (or 400%) means every $1 in ad spend brought back $4 in revenue. It measures revenue, not profit, which is why you also need your break-even ROAS.

ROAS formula and example

ROAS = revenue from ads / ad spend

Example: you spend $2,000 on ads in a month and those ads bring in $7,000 in sales. $7,000 / $2,000 = 3.5, so your ROAS is 3.5x, or 350%.

How to calculate break-even ROAS

Break-even ROAS is the ROAS at which your ads pay for themselves and nothing more. Below it, every sale from ads loses money. Above it, you make a profit before overheads.

Break-even ROAS = selling price / profit per order before ad costs

Example: you sell a product for $60. It costs $18 to make, $6 to ship and 3% ($1.80) in payment fees. Your profit before ads is $60 - $18 - $6 - $1.80 = $34.20. Break-even ROAS = $60 / $34.20 = 1.75x. Any ROAS under 1.75x loses money on that product, and the most you can pay to get one sale is $34.20.

If you only know your margin, use break-even ROAS = 1 / profit margin. A 40% margin gives 1 / 0.40 = 2.5x.

Break-even ROAS by profit margin

What is a good ROAS?

There is no single good ROAS. A 3x ROAS is excellent for a product with a 60% margin and a loss for one with a 25% margin. A good ROAS is one that sits comfortably above your break-even ROAS and leaves room for the profit you want after overheads. Work out your break-even first, then set a target. In the example above (break-even 1.75x), aiming for a 15% net profit needs a target ROAS of about 2.38x.

Target ROAS in Google Ads

Google Ads' Target ROAS bid strategy asks for your goal as a percentage. A target of 238% means you want $2.38 in conversion value for every $1 spent. Use the target ROAS from this calculator as your starting point, then adjust once the campaign has enough conversion data. Setting it far above what your account achieves can reduce how often your ads show.

Google explains the setting in its help article About Target ROAS bidding, and you can see how I set up bidding on the Google Ads management page.

Platform ROAS vs true ROAS

Google Ads and Meta each report their own ROAS, and both can count the same sale, so their numbers often add up to more revenue than you actually made. A simple check is blended ROAS: your total revenue for the period divided by your total ad spend across every platform. If the platforms say 4x but your blended ROAS is 2x, trust the blended number when you decide whether ads are profitable.

Getting conversion tracking right on Facebook and Instagram is a big part of fixing this, which I cover on the Meta Ads management page.

ROAS vs ROI

ROAS looks at revenue. ROI looks at profit. Using the example above, $7,000 in sales from $2,000 in ad spend is a 3.5x ROAS. If those sales leave $3,990 in profit before ads (a 57% margin), the profit after ads is $1,990, so ROI = $1,990 / $2,000 = 99.5%. Use ROAS to manage campaigns day to day and ROI to judge whether advertising grows the business.

ROAS for service businesses (HVAC, plumbing, electrical)

You can use the same maths if you sell jobs instead of products. Revenue is the number of jobs booked from ads multiplied by your average job value. Example: you spend $3,000 on ads and book 12 jobs at an average of $450, so revenue is $5,400 and ROAS is 1.8x. If your gross margin on a job is 50%, your break-even ROAS is 2.0x, so this campaign is losing about $300 even though it looks busy. Tracking calls and booked jobs back to each campaign is what makes this number reliable.

See how I track calls and booked jobs for home service companies.

How to improve your ROAS

• Raise profit per order: bundles, higher average order value, better supplier pricing. A higher margin lowers your break-even ROAS.
• Cut wasted spend: exclude search terms and audiences that never buy.
• Fix the landing page: faster load, a clear offer and fewer form fields convert more of the clicks you already pay for.
• Track conversions properly, so the platforms optimise for real sales or booked jobs, not just clicks.

Built and reviewed by Afraz Alam, Digital Marketing Consultant, who manages Google Ads and Meta Ads for ecommerce brands and home service companies. Last reviewed 21 October 2026. How I create content.