Free calculator
Break-even ROAS is the price of an order divided by what it leaves after the products, shipping, payment fees and returns. Enter three figures: on a €64,80 order with 19% VAT in it, the floor is 2,65×, the most an order can cost to win is €24,41, and the break-even POAS is 1,47×.
Break-even ROAS, VAT in, as Meta counts it
2,65×
25Maximum CPA
€24,41
the most one order can cost to win
Break-even POAS
1,47×
on gross profit, price without VAT minus products
What the platform cannot see
With 19% VAT in the price, your break-even ROAS rises from 1,92× to 2,65×.
With 10% of sales refunded, your break-even ROAS rises from 2,31× to 2,65×.
What you want left
Break-even is a floor, not a target: at it, the ads work and the month earns nothing from them.
↑ ↓ to nudge, Shift for ten. Commas or dots both work.
Shopify reports the purchase to Meta with VAT and shipping in it, so 2,65× on Meta is break-even; an account that reports values without VAT breaks even at 2,23×. To keep 10% of net revenue after the ads, aim for 3,32×.
Below 2,65× the ads lose money on every order they buy. One order leaves €24,41 after products, shipping, fees and returns, which is the most it can cost to win.
An estimate from flat rates. In nouz every order is priced from the costs of its own day.
Break-even ROAS is the purchase value an ad platform reports divided by what one order leaves after the product, shipping, payment fees and returns. Take the VAT out of that margin first: on a €64,80 order at 19% VAT, the floor rises from 1,92× to 2,65×. The calculator also gives the maximum CPA and the break-even POAS.
The formula
An ad platform divides the purchase value it saw by what the ads cost. The break-even ROAS has to be built the same way: that same purchase value, divided by what the order leaves once the products, the parcel, the payment fee and the returns are paid. At that ROAS the ad spend equals the margin and the profit after advertising is exactly zero.
The purchase value Shopify reports to Meta is the order total with VAT and shipping in it, so the margin has to come out of the price without VAT. On the figures above, a calculator that leaves the VAT in the margin puts the floor at 1,92×; the real one is 2,65×.
Returns push it higher still. The platform counted the sale at checkout and never takes it back, but a refund returns the revenue and its VAT, and only the products come back to the shelf.
nouz works this out for every product on Insights, Products, with and without VAT, beside the breakeven CAC, from the product’s own orders, returns and costs.
Where it goes wrong
Each of these makes a campaign look safer than it is, and they stack.
One divided by your margin is the shortcut every calculator teaches, and a European price still holds the VAT. Count it as margin and the floor on the figures above drops from 2,65× to 1,92×, and every campaign between the two loses money.
On the figures above, ignoring a 10% refund rate puts the floor at 2,31× instead of 2,65×. Every campaign between the two looks profitable and is not.
A margin after the products alone still has to pay for the parcel and the payment fee before it can pay for an ad. Leave them out and the break-even ROAS is the one for a store that ships for free and is never charged a fee.
At break-even the ads worked and earned nothing. Aim above it by the profit you want to keep: keeping 10% of net revenue on the figures above needs 3,32×, not 2,65×.
Worked example
The calculator’s starting order: a €64,80 price at 19% VAT, products costing €18,50, and €7,95 of shipping, packing and payment fee, with 10% of sales refunded.
After returns and VAT the order is worth €49,01, and it leaves €24,41 once the products and the other costs are paid. That is the most it can cost to win.
Meta has to report at least 2,65× for these ads to pay for themselves, because the value it reports still holds the VAT and the refunds. A target of 1,92×, the floor with the VAT left in the margin, would lose money on every order it bought.
Across the whole account the same floor is the break-even MER, 2,01×: the net revenue every euro of advertising has to bring in, from your own books.
Look it up
The margin is what an order leaves after products, shipping, payment fees and returns, as a share of its price without VAT. Without VAT the floor is one divided by it; on a purchase value with VAT in it, the figure Meta sees from Shopify, it rises by the rate.
| Margin | No VAT | 19% VAT | 20% VAT |
|---|---|---|---|
| 10% | 10,00× | 11,90× | 12,00× |
| 15% | 6,67× | 7,93× | 8,00× |
| 20% | 5,00× | 5,95× | 6,00× |
| 25% | 4,00× | 4,76× | 4,80× |
| 30% | 3,33× | 3,97× | 4,00× |
| 35% | 2,86× | 3,40× | 3,43× |
| 40% | 2,50× | 2,97× | 3,00× |
| 50% | 2,00× | 2,38× | 2,40× |
| 60% | 1,67× | 1,98× | 2,00× |
19% and 20% are the standard VAT rates in Germany and Austria. For your own margin, with shipping and returns in it, use the calculator at the top of the page.
In the app
A calculator works from flat rates you type once. nouz prices every single order from the cost rules that were in force on that order's own date, and rebuilds the same statement every night from your own orders and your own ad spend.
More calculators
Each one is a different question about the same statement. All 32 are free, and none of them asks you to sign up.
All calculatorsThe terms this calculator uses
The long version
Want the long version rather than the arithmetic?
The floorMER 1,90on one store's own margins9 min readSetting an ad budget from your margin, not from last monthMost budgets are last month's number plus a feeling. Build one from contribution instead: what the orders leave, what the fixed block needs, what is left to spend.Setting an ad budget from your marginOn Insights, Products, nouz works out CM2 for every product from your own orders, returns and costs, and beside it the breakeven CAC and the breakeven ROAS, with VAT and without.