Break Even ROAS Calculator
Calculate the ROAS you need to break even on your ad spend — with payment fees, returns, and chargebacks included.
How break-even ROAS is calculated
Your break-even ROAS is the ratio of ad revenue to ad spend where total revenue equals total cost. Here's how it's derived step by step:
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Calculate the payment fee per order Multiply your selling price by the payment fee rate (as a decimal), then add any fixed fee per transaction.
Payment Fee = Selling Price × (Payment Fee Rate ÷ 100) + Payment Fixed Fee -
Calculate your base variable cost per order Add together your product cost, shipping cost, and payment fee.
Base Variable Cost = Product Cost + Shipping Cost + Payment Fee -
Account for expected return losses Multiply your return rate by the average loss per returned order.
Expected Return Loss = (Return Rate ÷ 100) × Loss Per Return -
Account for expected chargeback losses Multiply your chargeback rate by the average loss per chargeback.
Expected Chargeback Loss = (Chargeback Rate ÷ 100) × Loss Per Chargeback -
Calculate your true contribution margin and break-even ROAS Subtract all variable costs from your selling price to get your contribution margin. Divide 1 by your CM ratio to find the ROAS that just covers your costs.
Contribution Margin = Selling Price − Base Variable Cost − Expected Return Loss − Expected Chargeback LossCM Ratio = Contribution Margin ÷ Selling PriceBreak-Even ROAS = 1 ÷ CM Ratio
What's covered — and what isn't
This calculator includes the variable costs that sit between your selling price and your net profit. Here's what we itemize and what we don't:
Hidden costs we don't cover
- VAT, GST, or sales tax (treat as part of selling price or add to product cost)
- Storage, fulfillment, or inbound shipping costs
- Advertising costs themselves (they're what you're solving for)
- Your time, overhead, or fixed costs
- Refurbishment, disposal, or write-off costs beyond the return event
- Currency conversion fees for international sales
- Payment method-specific fees beyond the card network fee
- Customer service or handling costs beyond the return event
If a cost isn't listed, add it into your product cost or shipping cost field, or account for it separately when interpreting your break-even ROAS.
Methodology and assumptions
Formula assumptions
Calculations assume single-SKU (one product per order). If you sell multiple products, use your average order value (AOV) instead of selling price in the first field.
Cost field definitions
All cost fields accept dollar amounts in the same currency as your selling price. Percentage fields (payment fee rate, return rate, chargeback rate) are interpreted as percentages (0–100).
Where default values come from
This tool does not pre-fill default values. All numbers you see are entered by you. We don't pull industry averages or benchmarks from any source.
Tool limitations
This tool does not account for multi-product orders, subscription models, CLV, or lifetime value. It does not predict future performance or guarantee results.
Frequently asked questions
ROAS stands for Return on Ad Spend. It is the ratio of revenue generated by an advertisement to the cost of that advertisement. For example, a ROAS of 3x means you earned $3 in revenue for every $1 spent on ads. ROAS is a measure of revenue efficiency, not profit.
ROAS is calculated by dividing your ad revenue by your ad spend. For example, if you spent $500 on ads and generated $1,500 in revenue from those ads, your ROAS is $1,500 / $500 = 3x. This calculator goes further: it tells you the break-even ROAS — the ROAS at which your ad campaign generates neither profit nor loss — accounting for your actual product costs, payment fees, returns, and chargebacks.
ROAS only measures revenue against ad spend. It ignores your product costs, payment processing fees, shipping, returns, and chargebacks. A ROAS of 4x can still result in a net loss if your costs consume more than 75% of your revenue. This calculator adds all those hidden costs so you can see whether your ads are actually profitable, not just revenue-efficient.
There is no single ROAS that is universally good or bad. A ROAS that is profitable for one business may not be for another, depending on profit margins. This calculator shows you your break-even ROAS — the minimum ROAS needed to avoid a loss, given your costs. Whether you target a ROAS above that depends on your business goals and profit requirements.
The main hidden costs this calculator covers are: payment processing fees (percentage + fixed per transaction), shipping costs, product costs, return losses (refund + non-recoverable shipping + restocking fees), and chargeback losses (disputed amount + fees). Fixed costs like rent, salaries, or software subscriptions are not included because they do not vary with individual orders.
Enter your selling price and product cost. Add any optional costs like shipping, payment fees, return rate, and chargeback rate. The calculator computes your contribution margin per sale — what's left after the directly variable costs — and divides 1 by that margin ratio to get your break-even ROAS. If you also enter your current ad spend and revenue, it calculates your actual ROAS and estimated profit or loss.
Yes. This calculator is platform-agnostic. Whether you advertise on Google Ads, Meta, TikTok, Amazon, or any other platform, you can use your ad spend and revenue from that platform. The calculator does not ask which platform you use — it only needs your numbers.
Yes. Calculator inputs are processed entirely within your browser. No data is submitted to any server or stored anywhere. The page does not use cookies, tracking scripts, or analytics. Your numbers stay on your device.
No. VAT and sales tax are not included in the calculator because they depend on your customer's location and your tax jurisdiction. If you are a seller required to remit taxes on revenue, account for those separately when evaluating profitability. The calculator works with pre-tax revenue figures.
The math is accurate relative to the inputs. The results are only as accurate as the numbers you provide. If your costs vary per order, use your average values. The calculator is designed for directional guidance — to help you understand whether your current ROAS is likely covering your costs. It is not a replacement for proper accounting or financial analysis.