Include
Variable costs that move with revenue
Product cost, fulfilment and shipping, transaction or platform fees, and a returns allowance are common inputs when they apply.
Margin-aware threshold
Break-Even ROAS Calculator
Turn your contribution margin or variable cost rates into the minimum attributed revenue multiple needed to cover ad spend within the entered cost boundary.
1Contribution margin= Break-even ROAS
01 · Cost boundary
Enter your margin
This is contribution break-even within the costs you enter. Fixed overhead, salaries, tax, and other unentered costs are not included.
The formula
Why 100% ROAS is usually not business break-even
A 100% ROAS only means attributed revenue equals media spend. If selling the product or delivering the service has variable costs, contribution can still be negative.
Break-even ROAS starts with the margin left before ads. Divide one by that decimal margin. A 40% contribution margin produces a 2.50× threshold: each $1 of ad spend needs $2.50 in attributed revenue to cover the entered variable costs and the ad spend.
Contribution margin40%
1 ÷ 0.402.50×
$1 ad spend needs$2.50 revenue
Illustrative arithmetic, not a benchmark or forecast.Avoid
Double-counting the same deduction
If attributed revenue is already net of refunds, use a zero refund allowance here. The same principle applies to any cost already removed upstream.
Remember
This is not total business profit
Fixed overhead, salaries, taxes, financing, and other costs remain outside the result unless they are reflected in the margin you enter.
FAQ
Break-even ROAS questions
What is the break-even ROAS formula?
Break-even ROAS equals one divided by contribution margin before ads, expressed as a decimal. A 50% margin is 0.50, so the threshold is 1 ÷ 0.50 = 2.00×.
Is 100% ROAS break-even?
It is only revenue-equals-ad-spend break-even. When product or other variable costs exist, contribution break-even is higher than 1.00×.
Which costs belong in contribution margin?
Include variable costs relevant to the decision, such as product cost, fulfilment and shipping, payment or platform fees, and expected returns or refunds. Keep the period and cost boundary consistent.
Can break-even ROAS prove that a campaign is profitable?
It can show whether attributed revenue clears the entered contribution boundary. It cannot prove causal incrementality or total business profitability, and it excludes costs that were not entered.