Break-even ROAS is the return on ad spend at which advertising just pays for itself out of margin, leaving zero profit after ads. You calculate it as 1 divided by your margin, times 100. A store with a 25% margin has a break-even ROAS of 400%. Below that line, every euro spent on ads reduces profit.
Break-even ROAS is the return on ad spend at which advertising just pays for itself out of margin, leaving zero profit after ads. You calculate it as 1 divided by your margin, times 100. A store with a 25% margin has a break-even ROAS of 400%. Below that line, every euro spent on ads reduces profit.
Without this number you cannot tell whether a ROAS is good. A 400% ROAS is a great result for a store with a 50% margin and a loss for one with a 20% margin. Break-even ROAS translates your gross margin into the scale Google Ads uses and gives your target ROAS a floor.
The input is your margin as a percentage of revenue excluding VAT or sales tax, written as a decimal. The more accurate the margin, the more accurate the line: the catalog margin in your product feed knows nothing about free shipping, payment fees or returns.
| Break-even ROAS | 1 ÷ margin × 100 | Example: 25% margin → 1 ÷ 0.25 × 100 = 400% |
| From real margin | 1 ÷ (margin − order costs) × 100 | Example: 30% − 5% for shipping and payments = 25% → 400% |
| Max ACoS | = margin | Example: 25% margin → ACoS no higher than 25% |
| Max CPA | average order value × margin | Example: €80 × 25% = €20 per order |
The line climbs fast as margin falls. A 50% margin needs a 200% ROAS, a 20% margin needs 500%, and a 10% margin needs a full 1,000%. That is why low-margin, low-price products rarely pay for advertising.
Enter your gross margin and the costs that only show up per order. The calculator returns the break-even line, the highest ACoS you can afford, the maximum cost per order and the target ROAS for the profit you want to keep after ads.
Break-even is a floor, not a goal. Set your target ROAS in Google Ads above it by as much as you want to keep for overheads and profit. The calculator above works it out from the profit you want as a share of revenue.
The exception is acquiring new customers who buy again. There you can go below the line on purpose, if you know the customer comes back and later orders cover the ad cost. CLV tells you how far below you can afford to go.
If your categories carry very different margins, one line for the whole account is not enough. Our rule: a margin gap of 10 or more percentage points means a separate campaign with its own target ROAS. At Elektro Sláma, category campaigns run at target ROAS between 4.2 and 4.9 depending on the category (Google Ads, 2026). And when you change a target, change it gradually: we move target ROAS by 15% at most and no more than once a week on the same campaign.
Break-even ROAS, ACoS, CPA, POAS and ROI all describe the same line. They only differ in which metric you read it in. Example for a 25% margin and an €80 average order:
| Metric | Break-even | At 25% margin | When to use it |
|---|---|---|---|
| Break-even ROAS | 1 ÷ margin × 100 | 400% | Target ROAS in Google Ads |
| ACoS | = margin | 25% | P&L, conversations with finance |
| CPA | order value × margin | €20 | Campaigns without conversion value, services |
| POAS | 100% | 100% | Ranges with mixed margins |
| ROI on ads | 0% | 0% | Channel decisions |
If you track margin by category, you can steer straight from this line. If you do not, switch to POAS, where break-even is the same for every product.
Metrics that show up in the same sentence as this one.
Margin is calculated on prices excluding VAT, the same way as the conversion value you send to Google Ads. If one number includes VAT and the other does not, the line shifts and your target ROAS is wrong.
Free shipping, payment processing, returns and discount codes all take percentage points off. Example: a 30% catalog margin minus 8 points of order-level costs leaves 22%. The line moves from 333% to 455%.
A ROAS exactly at break-even means the ads earned nothing; they only paid for themselves. Salaries, warehouse and rent are paid from what sits above the line. Always set the target higher.
Divide 1 by your margin written as a decimal and multiply by 100. A 25% margin gives 1 ÷ 0.25 × 100 = 400%. Use margin on prices excluding VAT, after shipping, payment and return costs.
333%. At a 40% margin it is 250%, at 20% it is 500%, and at 10% it is 1,000%.
Break-even ROAS is the line where profit after ads is zero. Target ROAS in Google Ads is set above it so that profit is left after ads. At a 30% margin, keeping 5% of revenue as profit needs a 400% target ROAS.
Maximum ACoS = 10,000 ÷ break-even ROAS in percent, which comes out as your margin. A 400% break-even ROAS equals a 25% maximum ACoS.
Briefly and on purpose, yes: while a new campaign ramps up, or when acquiring customers who buy repeatedly. Not in the long run, because every euro below the line cuts profit.
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