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ROAS calculator: what your ads need to return

Return on ad spend (ROAS) is revenue from ads divided by what the ads cost. A ROAS that looks good can still lose money once product costs and fees come out. Put in your numbers to see your ROAS, the break-even ROAS for your margins, your profit or loss on the ads, and the budget it takes to reach a revenue goal.

Your ROAS and break-even ROAS
Profit or loss on the ads
The budget your goal needs

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Ad spend (a month)

Revenue from those ads

Gross margin

What a sale keeps after the cost of the product or job.

Other costs per sale

Card and platform fees, delivery, as a % of the sale.

Purchases per customer (optional)

If customers buy again, how many times in all.

Revenue goal (a month)

Your return on ad spend

Your ROAS is 3.5:1 against a break-even of 2.5:1, so the ads make about £800.

3.5:1Your ROAS

2.5:1Break-even ROAS

£800Profit on the ads

You 3.5:1

2.5:14.6:1

The coloured band is where your ads make money.

In your full report

The ad budget your revenue goal needs
Your ROAS with repeat purchases

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How do you calculate ROAS?

Divide the revenue your ads brought in by what the ads cost. £5,000 of sales from £1,250 of spend is a ROAS of 4:1, sometimes written as 400%.

Count revenue the same way every month, and use your own shop or sales figures where you can. Google Ads and Meta each count the sales they can link to an ad by their own rules, so the two together often claim more than you really sold.

What ROAS do you need to break even?

Work out what a sale keeps after the cost of the goods and any fees, such as card charges, platform fees and delivery. Break-even ROAS is 1 divided by that share.

The lower your margin, the higher the ROAS you need. A brand keeping 60% of each sale is in profit at 2:1, while a reseller keeping 20% loses money below 5:1.

Break-even ROAS by what a sale keeps
What a sale keeps after costs and fees	Break-even ROAS	Each £1 of ads must bring back
20%	5:1	£5.00
25%	4:1	£4.00
30%	3.33:1	£3.33
35%	2.86:1	£2.86
40%	2.5:1	£2.50
50%	2:1	£2.00
60%	1.67:1	£1.67
70%	1.43:1	£1.43

Arithmetic, not benchmarks: break-even is 1 ÷ what a sale keeps, the same rule the calculator uses.

What is a good ROAS in the UK?

A good ROAS beats your break-even by enough to cover the costs ROAS leaves out: staff, software and any agency fee. Set the target before you start, for example 3.5:1 if you break even at 2.5:1.

Judge new-customer campaigns and repeat-customer campaigns apart. Ads shown to people who already know you, such as past visitors or your email list, usually report a much higher ROAS, because many of them would have bought anyway.

How do you work out the ad budget for a revenue goal?

Divide the revenue goal by your current ROAS. To reach £12,000 a month at 3:1 you need about £4,000 of ad spend.

Treat that as the most to expect, not a promise. ROAS usually falls as spend rises, because the readiest buyers are reached first, so raise budgets in steps and check the return at each one. Four mistakes make the sum look better than it is:

Using gross margin and forgetting fees and delivery.
Adding Google and Meta figures together, which counts some sales twice.
Counting VAT in revenue, which flatters ROAS by a fifth.
Judging a month with too few sales to mean anything.

How the tool works

Put in your ad spend and the revenue it brought in.
Add your gross margin and any fees, so the calculator knows what a sale keeps.
See your ROAS, your break-even ROAS and the profit or loss on the ads.
Set a revenue goal to see the budget it needs at your current ROAS.

How Scale Oxford helps

Want a ROAS target set from your real margins?

We work out your break-even and target ROAS from your own margins, fees and repeat purchases, then set your campaigns to bid towards it. We count sales the same way every month, so the figure you judge us on is one you can check.

We set a target ROAS from your margins, fees and how often customers buy again.
We match Google and Meta figures against your own sales so nothing is counted twice.
We raise budgets in steps and stop where the return drops below your target.

Book a free call See our PPC service

Case study · BoConceptScale Oxford brought the cost of each online sale from Google Ads down by 43% for BoConcept. The account was counting some sales twice and missing others, so Google was bidding on the wrong numbers. We fixed the tracking before touching a single bid.↓ 43%Lower cost per sale↑ 81%Higher return on ad spend↑ 162%More revenue from Google AdsRead the case study →

Questions people ask

What is a good ROAS?

There is no single good ROAS: it depends on your margin. A business keeping 50% of each sale breaks even at 2:1 before other costs; one keeping 25% needs 4:1. The calculator works out yours.

How do you calculate break-even ROAS?

Break-even ROAS is 1 divided by your margin after costs. At a 40% margin it is 1 ÷ 0.40 = 2.5, so every £1 of ads must bring back £2.50 of sales just to break even.

Is ROAS the same as ROI?

No. ROAS compares revenue with ad spend. ROI compares profit with everything you spent. A campaign can have a high ROAS and a negative ROI once costs are counted.

Should I count repeat customers?

If customers buy again, the first sale understates what an ad brought in. Tick the lifetime value option and put in how many times a customer typically buys.

What is a 4:1 ROAS as a percentage?

A 4:1 ROAS is 400%: every £1 of ads brought back £4 of revenue. Platforms may show it as 4, 4.0 or 400%, and all three mean the same.

Why is my ROAS high but my profit low?

Because ROAS counts revenue, not profit. A 3:1 ROAS on a product that keeps 35% after costs leaves about £50 on £1,000 of ads, before staff, software and fees. Check your break-even ROAS before celebrating a high one.

Can ROAS be too high?

Yes. A very high ROAS often means you are spending too little: if every campaign returns 10:1, more spend would probably still make money, just at a lower return per pound. The aim is the most profit, not the highest ratio.

Should I use target ROAS bidding in Google Ads?

Once a campaign has a steady flow of tracked sales, target ROAS bidding lets Google aim for the return you set. Set the target from your break-even plus a margin, not from a figure you have heard. A target set too high can starve a campaign of clicks.

How long should I wait before judging ROAS?

At least four weeks, and long enough that one large order cannot swing the figure. A month with five sales can show 6:1 or 1:1 by chance. If customers take weeks to decide, wait longer or judge on enquiries first.

Should ROAS include VAT?

No. Compare revenue and ad spend both without VAT. Counting 20% VAT on sales alone makes ROAS look a fifth higher than it is.

What is MER and how is it different from ROAS?

MER, the marketing efficiency ratio, is all your revenue divided by all your marketing spend. Unlike ROAS it does not depend on which platform claims a sale, so double counting cannot inflate it. Many shops watch both: ROAS to steer each campaign, MER to check the business as a whole.