ROAS calculator: formula, break-even ROAS and what a good ROAS really is

ROAS stands for return on ad spend. It tells you how much revenue each unit of ad spend brought back. If you spend $1,000 on Meta ads and those ads bring in $4,000 in sales, your ROAS is 4.

ROAS = revenue from ads ÷ ad spend

ROAS is a revenue metric, not a profit metric. It ignores product costs, shipping, payment fees and returns. That is why a ROAS that looks healthy in Ads Manager can still lose money, and why the calculator on this page also asks for your gross margin.

In twelve years of running ad accounts, first at agencies and later on the client side as head of marketing, the hard question has rarely been how to calculate ROAS. It is whether a given number is good enough. The rest of this page answers that with your own margin, not with a generic benchmark.

You need two numbers from the same period: the revenue your ads generated and what you paid the ad platforms. Divide the first by the second.

1. Pick a period, for example the last 30 days.
2. Take the ad spend for that period from Meta, Google or TikTok (or all of them combined).
3. Take the revenue those ads generated. Use net revenue after VAT, discounts and returns if you can.
4. Divide revenue by spend. $12,000 ÷ $3,000 = 4.0.
5. To show it as a percentage, multiply by 100: 4.0 × 100 = 400%.

Both notations mean the same thing. The x version is common in English-speaking ad teams, the percentage in German and Spanish reporting. Watch out for one mix-up: a ROAS of 100% is not a profit of 100%. It means revenue equals spend, so you lost money once product costs are included.

The calculator sits directly below the summary at the top of this page. Enter three values and it returns four results.

• Revenue from ads: the sales attributed to your campaigns, ideally net of VAT and returns.
• Ad spend: what you paid the platforms in the same period.
• Gross margin in %: revenue minus cost of goods, shipping and payment fees, divided by revenue.

You get your ROAS as a multiple and as a percentage, your break-even ROAS, and the profit or loss left after ad spend. If the last number is negative while the ROAS looks fine, your margin is the problem, not your campaigns.

Break-even ROAS is the ROAS at which your ads neither make nor lose money. Below it, every sale costs you more in ads than it earns in gross profit. You calculate it from your gross margin.

Break-even ROAS = 1 ÷ gross margin (as a decimal)

At a 40% gross margin: 1 ÷ 0.40 = 2.5. Every $1 of ad spend has to bring back $2.50 in revenue just to cover itself.

The last column is the useful one in daily work: at break-even, your ad spend can be as high as your gross profit, never higher. A worked example: $12,000 revenue, $3,000 spend, 40% margin. Gross profit is $4,800, minus $3,000 in ads leaves $1,800. ROAS is 4.0x against a break-even of 2.5x, so the campaigns are profitable.

A good ROAS is any ROAS comfortably above your break-even ROAS. For a brand with a 70% margin, 2x is solid profit. For a reseller with a 20% margin, 2x loses money on every order. That is the honest answer, and it is why benchmarks alone are dangerous.

Published benchmarks still help you judge whether a channel is in a normal range. Triple Whale reports a median ROAS of 1.88 on Meta across more than 40,000 ecommerce brands and 3.27 on Google across more than 21,000 brands, both for August 2025 to July 2026 (Meta benchmarks, published 18 August 2026; Google benchmarks, published 20 August 2026). Google numbers usually include branded search, where people already looking for you click an ad, which lifts the figure.

The margin ranges in this table are illustrations for the calculation, not measured industry averages. Put your own margin into the calculator above and you get your own threshold.

Each metric answers a different question. ROAS measures revenue efficiency of ads, ROI measures profit on total investment, POAS measures gross profit per ad dollar, and CPA measures the cost of one conversion.

POAS fixes the biggest weakness of ROAS by putting profit instead of revenue on top. It needs product-level cost data, though, which many accounts do not pass to the platforms. MER is covered in depth in our guide to true ROAS and MER.

Most ROAS numbers are too high, not too low. These are the mistakes I check first when a client's ROAS looks great but the bank account does not.

• Adding up platform ROAS. Meta, Google and TikTok each count a sale if their ad was involved. The same order can appear in all three reports. Meta's standard attribution can credit purchases up to 7 days after a link click and 1 day after a view (Meta Business Help Center); Google Ads uses a 30-day click window by default (Google Ads Help). Compare the sum with the revenue in your shop.
• VAT in the revenue. If your pixel sends gross prices, a 20% UK VAT or 19% German VAT inflates ROAS by the same amount. A reported 4.0x on gross prices is about 3.3x net at 20% VAT.
• Returns and cancellations. Platforms keep the purchase even when the customer sends it back. Fashion shops in particular should deduct their return rate.
• Shipping and discounts. Shipping fees you pass through are not product revenue, and a discount code lowers what you actually receive.
• Modelled conversions. Google and Meta add estimated conversions they could not observe directly, for example when users decline cookies (Google Ads Help on modelled conversions). These are estimates, not orders.

Use ROAS to compare campaigns inside one platform, and use the company number to decide how much to spend in total. The company number is the revenue or leads that show up in your shop, CRM or sheet, not the platform report.

That is how Marketing AIgency works. Its AI agents review Meta, Google and TikTok ad accounts against the company number from Shopify, a CRM, a sheet or its own first-party pixel. Every suggestion lands in an approval queue with the reasoning behind it, and nothing runs until you approve it. If you are comparing that with hiring help, see what a Facebook ads agency costs, and for budgets see how much Facebook and Instagram ads cost. Plans are fixed monthly prices with no percentage of ad spend, see pricing.