Break-even ROAS calculator
The ROAS your ads need before they make money, for an online store or a service business. Add costs, fees and refunds, set a profit goal, and see the most you can pay for a client or a booked call.
Results update as you type. Nothing is saved or sent anywhere.
Break-even ROAS
Enter price and cost
Results update as you type. Nothing is saved or sent anywhere.
Contribution margin
Enter price and cost
Target ROAS
Enter price and cost
Break-even cost per purchase
Enter price and cost
How to calculate break-even ROAS
Break-even ROAS is 1 divided by your contribution margin: the share of each sale left after the cost of delivering it, the fees and the refunds. The thinner the margin, the more revenue each ad dollar has to bring back.
Contribution margin
(Price × (1 − Refund rate) − Price × Fees − Cost per sale) ÷ Price
Break-even ROAS
1 ÷ Contribution margin
Target ROAS
1 ÷ (Contribution margin − Profit goal)
Max cost per client
Price × Contribution margin
Max cost per booked call
Max cost per client × Close rate
Write percentages as decimals: a 77% margin is 0.77, so break-even ROAS is 1 ÷ 0.77 ≈ 1.3. Refunds are counted the cautious way: the revenue is lost, while the cost of the order and the fees are still paid.
A worked example
Hypothetical example. Made-up numbers, not client data.
- 1A $2,000 offer costs $400 to deliver and pays 3% in fees: 2,000 − 400 − 60 = $1,540 per client, a 77% margin.
- 2Break-even ROAS: 1 ÷ 0.77 = 1.3x. Every $1 of ads has to bring back $1.30 in sales.
- 3With a 30% profit goal: 1 ÷ (0.77 − 0.30) = 2.13x target ROAS.
- 4One in four booked calls closes, so a booked call can cost up to 1,540 × 0.25 = $385 before the ads lose money.
Ads can spend up to $1,540 to win this client and still break even. The target ROAS is where the profit starts.
Break-even is the floor, not the goal
Break-even ROAS is where the ads pay for themselves and nothing more. Overheads, team and the profit you want all sit above it, which is what the target ROAS is for.
No ROAS is good for every business. Thin margins need a high ROAS just to stand still, while an offer with low delivery costs can scale on a much lower one. Compare your actual ROAS with your own target: the ROAS calculator gives you the actual number.
For services, turn the margin into a ceiling: the most you can pay per client and per booked call. Then check what you actually pay with the CPM calculator, and find the step that costs the most with the conversion rate calculator.
Break-even ROAS questions
Ads running below break-even?
We build the funnel between the ad and the close: offer, page, booking, follow-up and tracking. Apply and we will tell you if we can lower your cost per client.