Break-even ROAS Calculator
Break-even ROAS is the return on ad spend at which your contribution before advertising exactly covers your advertising cost. Enter the price your customer pays and the variable costs of fulfilling one order to see the number your campaigns have to beat.
€79.00 including 21% VAT = €65.29 net revenue.
Per-order app fees, inserts, returns provision.
Your average effective transaction rate.
Payment cost: €1.44 per order.
Payment fees vary by payment method, Shopify plan, country, card type and payment provider. Use your average effective transaction fee for the most realistic estimate.
Compare with VAT-inclusive revenue instead? 2.31× is the same order measured against the price the customer pays. Use whichever matches how your ad platform reports purchase value — the net figure is the one that reflects profit.
- Below 1.91×Negative contribution after advertising
- 1.91×Break-even
- Above 1.91×Positive contribution after advertising
- Net revenue per order
- €65.29
- Variable costs per order
- €31.13
- Contribution before advertising
- €34.15
- Contribution margin before advertising
- 52.3%
- Maximum break-even CPA
- €34.15
How we calculated this
- Selling price incl. VAT
- €79.00
- VAT
- − €13.71
- Net revenue
- €65.29
- COGS
- − €24.00
- Shipping
- − €4.50
- Packaging & handling
- − €1.20
- Payment fees
- − €1.44
- Other variable costs
- − €0.00
- Contribution before advertising
- €34.15
Payment fees are charged on the full amount collected from the customer, VAT included. Fixed costs such as salaries, rent and software are not part of this calculation.
What is break-even ROAS?
Break-even ROAS is the ROAS at which your contribution before advertising exactly covers your advertising cost, leaving €0 contribution profit after advertising. Above it, each additional euro of ad spend adds contribution profit; below it, you are buying revenue at a loss. It comes from your own margins rather than an industry benchmark, which is what makes it a usable campaign guardrail.
How is break-even ROAS calculated?
Net revenue = selling price − VAT (when the price includes it)
Contribution before advertising = net revenue − COGS − shipping − packaging − payment fees − other variable costs
Break-even ROAS (net) = net revenue ÷ contribution before advertising
Break-even ROAS (gross) = price charged incl. VAT ÷ contribution before advertising
Both describe the same order — they differ only in how revenue is defined. The net figure is the profitability-correct one. The gross figure exists because ad platforms report whatever purchase value your store sends them, which is often VAT-inclusive. With no VAT the two numbers are identical.
Payment fees are charged on the full amount collected from the customer, VAT included, so they are calculated as a percentage of the charged price plus a fixed fee per transaction.
Example
A product sells for €79.00 including 21% VAT, so net revenue is €65.29. COGS is €24.00, shipping €4.50, packaging €1.20 and payment fees €1.44 — €31.13 of variable costs. Contribution before advertising is €34.15, so break-even ROAS on net revenue is 1.91×. Measured against VAT-inclusive revenue the same order breaks even at 2.31×. At break-even, advertising consumes the entire contribution and the order leaves €0 contribution profit.
Why this matters for ecommerce stores
Most stores optimise toward a ROAS target inherited from someone else. If your margins are thinner than theirs, that target quietly loses money on every order; if they are fatter, you leave growth on the table. Knowing your own number lets you scale spend deliberately instead of debating whether a 2.0× campaign is good.
Frequently asked questions
- What is a good break-even ROAS?
- There is no universally good number — it depends entirely on your contribution margin before advertising. A product leaving 60% of net revenue after variable costs breaks even around 1.67×, while one leaving 25% needs 4.0×. Lower is better, and the only way to lower it is to improve margin.
- Should I compare this to the ROAS my ad platform reports?
- Only if the two use the same revenue definition. This calculator's break-even ROAS is based on net revenue (VAT excluded), because VAT is never yours. Ad platforms usually report purchase value exactly as your store sends it, which for VAT-inclusive pricing includes VAT. Compare like with like: use the net break-even ROAS against net conversion value, or the gross break-even ROAS shown next to it if your platform reports VAT-inclusive revenue.
- Should I include VAT in the selling price?
- You can enter the price your customer pays and tell the calculator whether it includes VAT. VAT is never yours to keep, so it is removed before anything else. Using a VAT-inclusive price as revenue would make your break-even ROAS look better than it really is.
- Does break-even ROAS include fixed costs?
- No. Break-even ROAS accounts for your non-advertising variable costs to determine how much is left for customer acquisition. At break-even, revenue covers those variable costs plus advertising, leaving €0 contribution profit — rent, salaries and software still have to be paid from contribution earned above break-even.
- Why is my actual ROAS above break-even but I still lose money?
- Usually refunds, discounts or costs missing from the model. Platform ROAS is also attributed revenue divided by that platform's spend, so it can overstate performance. Compare platform ROAS with blended MER (total store revenue ÷ total advertising spend) to judge advertising efficiency, then use contribution profit to see what the store actually kept.
Your break-even ROAS changes when your costs change.
Your product mix, AOV and costs change over time. Connect Shopify to automatically track your contribution margin and understand the ROAS your store needs to remain profitable.
Connect ShopifyRelated guides
- How to Calculate Your Break-even ROAS — Calculate the minimum ROAS your campaigns need based on your actual product and fulfilment economics.
- ROAS vs MER: What's the Difference? — Understand what ROAS and MER actually measure, when to use each, and why neither tells you your profit.
Related calculators
- Target CPA Calculator — the most you can pay per customer
- Contribution Margin Calculator — what's left per sale after variable costs
- Ecommerce Profit Calculator — your store's contribution profit for a period
- All free ecommerce calculators