Return on Ad Spend (ROAS) Calculator
Return on ad spend is the single most-watched number in paid marketing: how much revenue does each advertising dollar bring back? A ROAS of 4:1 means every dollar of spend returned four dollars of revenue. But raw ROAS can mislead if you ignore product margins, so this calculator also computes your break-even ROAS, the threshold below which a campaign loses money once cost of goods is counted. Enter the revenue attributed to your advertising, the ad cost, and your gross margin, and the tool returns the ROAS ratio, the ROAS percentage, and the break-even ROAS.
ROAS formula
ROAS = revenue from ads / ad spend
ROAS % = ROAS * 100
Break-even ROAS = 1 / (gross margin / 100)
ROAS above the break-even ROAS means the campaign is profitable once product margin is counted; below it, the campaign loses money even if ROAS looks positive.
Reading your ROAS
- ROAS only counts ad spend, not product or fulfilment costs; use break-even ROAS to factor those in.
- A common target is 4:1, but the right level depends entirely on your margin.
- If gross margin is 25%, you need a 4:1 ROAS just to break even.
- Compare ROAS across channels to shift budget toward the most efficient spend.
- Attribution windows affect revenue, so keep them consistent when comparing campaigns.
Return on ad spend: frequently asked questions
What is return on ad spend?
Return on ad spend (ROAS) measures the revenue generated for every dollar spent on advertising. A ROAS of 4 means you earned US$4 in revenue for each US$1 of ad spend. It is the core efficiency metric for paid marketing campaigns.
How is ROAS calculated?
ROAS equals revenue attributed to advertising divided by the advertising cost. For example, US$20,000 of revenue from US$5,000 of ad spend gives a ROAS of 4, or 400%. It is often expressed as a ratio (4:1) or a percentage (400%).
What is a good ROAS?
It depends on your margins. A common rule of thumb is a 4:1 ROAS, but a business with thin margins needs a higher ROAS to be profitable, while a high-margin business can profit at a lower ROAS. Break-even ROAS equals 1 divided by your gross margin.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only, ignoring product costs and other expenses. ROI (or return on investment) compares profit to total cost. A campaign can have a strong ROAS yet a negative ROI if the products sold carry low margins or high fulfilment costs.
What is break-even ROAS?
Break-even ROAS is the ROAS at which advertising profit is zero after accounting for product margin. It equals 1 divided by the gross margin (as a decimal). If your gross margin is 25%, you need a ROAS of 4 just to break even on the advertised products.
Official sources
- U.S. Federal Trade Commission: Advertising and marketing guidance.
- U.S. Small Business Administration: Manage your finances.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.