Return on ad spend, or ROAS, tells you how much revenue each pound of advertising brings back. Breakeven ROAS is the single most important number on top of that: the point where a sale earns exactly enough to cover the product, the delivery, the payment fees and the ad that won the click, with nothing left over. Spend more efficiently than your breakeven and every order adds profit. Slip below it and you are paying to lose money, however healthy the campaign looks in the ad platform.
This free calculator works out your breakeven ROAS from the real economics of a single order. Enter your selling price, cost of goods, delivery, payment fees and any other variable costs, then flip the VAT toggle if you are registered so the 20% is stripped out first. You get your contribution margin per order, a visual breakdown of where every pound of the price goes, and the exact ROAS you need to keep 10%, 20% or 30% net profit. It is built for Shopify and ecommerce owners, media buyers and founders who want a defensible target before they scale ad spend.
Prefilled at 2% + 25p, which matches Shopify Basic. Charged on the gross price the customer pays.
Optional. Packaging, pick and pack, or per-order app fees.
Margin per order
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Margin %
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Target ROAS to keep net profit
Every segment is its share of your £0.00 selling price. Green is the margin left to cover ads and profit.
Net price is what you keep from the sale. If you are VAT registered we divide the selling price by 1.2 to remove the 20% VAT that belongs to HMRC (net = price ÷ 1.2). If you are not registered, net price equals the selling price. The payment fee is charged on the gross price the customer pays, so we apply your percentage and flat fee to the full selling price, not the net figure.
Contribution margin = net price − cost of goods − shipping − payment fee − other costs. Breakeven ROAS = net price ÷ contribution margin. At that ROAS your ad spend exactly equals the margin, so profit is zero. Below breakeven, ad spend is larger than the margin and every sale loses money. For a target net margin d, the required ROAS = net price ÷ (margin − d × net price). If that denominator is zero or negative the target is not achievable, because the margin cannot fund that much profit and the ad cost at the same time.
Pricing and benchmarks last verified 2026-07-04. Always confirm current figures with the providers before making decisions.
Breakeven ROAS is the return on ad spend at which your advertising exactly pays for itself. At that ratio the revenue from a sale covers the product, delivery, payment fees and the ad that won the click, leaving nothing. Spend more efficiently than your breakeven and each sale adds profit. Slip below it and every order loses money, however good the campaign looks in the ad platform.
If you are VAT registered, one sixth of the price you charge is not yours to keep, it goes to HMRC. We strip that 20% out first so your margin and breakeven are based on the money you actually retain. Ignoring VAT makes your breakeven look better than it really is and can push you into spending at a loss.
On the gross price. Your card processor charges its percentage and flat fee on the full amount the customer pays, VAT included, so we apply the fee to the selling price rather than the net figure. That is why the payment fee is worked out before VAT is stripped from the price.
Higher than breakeven, with enough headroom to fund the profit you want. The target table shows the ROAS needed to keep 10%, 20% or 30% net margin after ad spend. If a row says it is not achievable, your contribution margin is too thin to leave that much profit once the ads are paid for, so you would need a better margin, not just a better campaign.
A negative margin means your costs already exceed what you keep from each sale, so no amount of advertising efficiency will rescue it. Raise your price, cut cost of goods or delivery, or trim payment and other variable costs until the contribution margin is positive. Only then is there a breakeven ROAS worth advertising towards.
Built by JW Digital, a Manchester ecommerce agency. We build fast, high-converting Shopify and custom stores so more of every ad click turns into profit, not just traffic. Get a free quote, no obligation.