Free tool
Break-Even ROAS Calculator
Your break-even ROAS is one divided by your gross margin. At a 40% margin that is 2.50x, at 20% it is 5.00x, at 80% it is 1.25x. Enter your margin, or a price and a unit cost, to find the line.
Last updated: 2026-08-06
Break-even ROAS is the return on ad spend at which a campaign makes nothing and loses nothing, and it is decided by your margin rather than by your advertising. One divided by gross margin gives it: a 40% margin needs 2.50x, a 20% margin needs 5.00x, an 80% margin needs 1.25x. Every judgement about whether a campaign is working starts here, because without this line a return is just a number that went up or down.
The reason it is one over margin is easier to see in dollars. On a $60 order at a 40% margin, $24 of every sale is left after the cost of goods, so $60 of revenue can only carry $24 of ad spend before the sale is underwater. Sixty divided by twenty-four is 2.50, and that ratio holds at any order value because both sides scale together. Margin sets the line; the size of the basket does not.
This calculator works from either end. Enter a gross margin if you know it, or enter a price and a unit cost and it works the margin out, which is usually the faster route because most people can name what something sells for and what it costs to deliver long before they can name a percentage. Either way it prints the break-even multiple, and adds a target row for the profit you actually want on top of standing still.
That target row matters because break-even is not a goal, it is a floor. Wanting 20% profit on the spend at a 40% margin means (1 + 0.20) divided by 0.40, which is 3.00x rather than 2.50x. The gap between those two figures is the entire argument about whether an account is performing, and most accounts that feel like they are working while the bank balance disagrees are running somewhere between the two.
Start from your gross margin
Break-even ROAS is 1 divided by gross margin. Enter the margin if you know it, or a price and a unit cost and it is worked out for you.
What is left of a sale after the costs that scale with it: goods, shipping, payment fees, expected returns.
break-even ROAS = 1 / gross margin, target ROAS = (1 + desired profit) / gross margin
Enter your gross margin to see the return you need just to break even.
The full margin to break-even table is printed below, from a 20% margin at 5.00x to an 80% margin at 1.25x.
Everything here runs in your browser. Nothing you type is sent anywhere and there is no email step: the 7 row margin table and the worked examples below are free to read without entering anything at all.
The formula, worked three ways
One relation, taken from a price and a unit cost through to the return the account has to hit. Every figure below is printed on the page rather than calculated in your browser.
- 1What is the gross margin?
gross margin = (price - unit cost) / price x 100
($60 - $36) / $60 x 100 = 40%
Everything that scales with the order belongs in the unit cost: goods, shipping, payment fees and expected returns. Rent and salaries do not.
- 2What return covers that margin?
break-even ROAS = 1 / gross margin
1 / 0.40 = 2.50x
In dollars the same thing reads: $60 of revenue carries $24.00 of margin, and $60 divided by $24.00 is 2.50x.
- 3What return actually makes money?
target ROAS = (1 + desired profit) / gross margin
(1 + 0.20) / 0.40 = 3.00x
The gap between 2.50x and 3.00x is the entire argument about whether an account is performing. Break-even is a floor, not a goal.
Margin to break-even ROAS
The whole table, printed so you can find your margin without typing anything. Break-even is 1 divided by margin; the target column adds a profit on the ad spend on top of it.
| Gross margin | Break-even ROAS | Target ROAS at 20% profit | Most one customer can cost on a $60 order |
|---|---|---|---|
| 20% | 5.00x | 6.00x | $12.00 |
| 30% | 3.33x | 4.00x | $18.00 |
| 40% | 2.50x | 3.00x | $24.00 |
| 50% | 2.00x | 2.40x | $30.00 |
| 60% | 1.67x | 2.00x | $36.00 |
| 70% | 1.43x | 1.71x | $42.00 |
| 80% | 1.25x | 1.50x | $48.00 |
The curve is steep at the thin end and flat at the fat end, which is the practical point of the whole table. Moving from a 20% margin to a 30% one drops the return you need from 5.00x to 3.33x, while moving from 70% to 80% only drops it from 1.43x to 1.25x. On a thin margin, a small pricing or cost change is worth more than any amount of campaign optimisation.
Where these numbers come from
Nothing in the table above is a benchmark or an estimate. Break-even ROAS is one divided by your gross margin and target ROAS adds the profit you asked for, so every figure is arithmetic on numbers you supplied rather than data about anybody else. That is also why the answer is only as good as the margin you put in: leave shipping, payment fees or returns out of the unit cost and the line will sit lower than the real one.
How to hold the line once you know it
- Use gross margin, not net. Cost of goods, payment fees, shipping and returns belong in the calculation because they scale with the order; rent and salaries do not and will make the line unreachable if you include them.
- Recalculate after a discount. A 20% off code on a 40% margin product does not leave 20% margin, it leaves 25%, and the break-even multiple moves from 2.50x to 4.00x while every dashboard keeps reporting against the old target.
- Set the working target above break-even on purpose. Wanting 20% profit on the spend at a 40% margin means aiming at 3.00x, and an account run at exactly break-even is one bad week away from having funded its own losses.
- Convert the line into dollars for the people buying media. A ratio is hard to act on mid-campaign; average order value times margin, which is $24 on a $60 order at 40%, is a number a buyer can check a campaign against on a Tuesday.
- Sanity check the attribution before trusting the comparison. Platforms report revenue generously to themselves, so a campaign clearing break-even on platform-reported revenue and missing it in your own analytics is the normal case rather than the exception.
- Only pay above the first-order line if repeat purchases are measured. A subscription or a genuine repeat business can justify running under break-even on the first sale; a hope that customers will return cannot, and the difference is whether you can produce the number.
Frequently asked questions
What is break-even ROAS?
The return on ad spend where revenue exactly covers the cost of goods plus the ad spend, so the campaign neither makes nor loses money. It equals 1 divided by gross margin: 2.50x at a 40% margin, 5.00x at 20%, 1.25x at 80%. Anything above the line is profit on the spend, anything below it is a subsidy you are paying for the sale.
How do I work out my gross margin?
Subtract what one unit costs you to deliver from what it sells for, then divide by the price. A $60 product that costs $36 in goods, fees and shipping leaves $24, which is a 40% margin. Include everything that scales with the order, so payment processing, packaging, shipping and expected returns all count. Leave out fixed costs like rent, salaries and software, because they do not rise with the next sale.
What is a good target ROAS?
Break-even plus whatever profit you need the spend to produce. The formula is (1 + desired profit) / gross margin, so at a 40% margin with 20% profit on the spend the target is 3.00x against a 2.50x floor. This is why cross-industry target numbers are close to meaningless: a 3x target is ambitious on a 25% margin and unambitious on an 80% one.
Why is my 3x campaign still losing money?
Almost always one of three things. Your margin is thinner than the calculation assumed, often because discounts, returns or shipping were not counted. The reported revenue is not the revenue that landed, because the platform is attributing generously. Or the 3x is measuring ad spend alone while the business is also carrying agency fees, tooling and creative costs, which are real money the ratio never sees.
Should break-even ROAS or break-even CPA be my target?
They are the same line expressed in different units, so use whichever the people acting on it can check faster. Break-even ROAS is a ratio that works across products with different prices; break-even cost per acquisition, which is average order value times margin, is a dollar figure a media buyer can compare a campaign against directly. On a $60 order at a 40% margin they are 2.50x and $24, and they say exactly the same thing.
Is this calculator free, and is anything stored?
Free, ungated and entirely local. Your margin, price and cost never leave the browser, there is no email step, and the full margin to break-even table is printed on the page, so you can read the answer for any margin without typing anything.
See the real number instead of the estimate
Postify Ads runs campaigns across Meta, Google, TikTok, LinkedIn and Pinterest from one place, with spend, clicks and conversions from all five in a single view. This calculator prices the plan; that is where the account reports back.
Related free tools
Keep the rest of the checklist close: each tool works on its own, no account needed.
Know the line, then keep every channel pointed at it
Postify supports nine platforms in one workflow: plan, schedule, and publish without juggling five different tools.