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POAS calculator

POAS (profit on ad spend) = contribution margin ÷ ad spend. A POAS of 1.0 means your ads exactly pay for themselves; at 2.0, every €1 of ads returns €1 of profit after the ad cost. Enter your numbers below to calculate yours.

Berend Vrakking, founder. Last updated .

Sales
€

Revenue from your ads, same period as the ad spend

%

Enter 0 if revenue is excl. VAT

€
Product economics
%

Margin after cost of goods

%

Share of revenue refunded

%

% of revenue after returns, excl. VAT

Shipping and fees
€
€
%

% of revenue after returns, excl. VAT

Target (optional)
%

% of revenue excl. VAT. Sets the target POAS. Enter 0 to target break-even.

Your results

Profitable: a POAS of 2.01 is above break-even (1.0). €1.01 profit for every €1 of ads.

POAS
2.01
Contribution margin ÷ ad spend
Contribution margin
€2,408.68
Revenue excl. VAT minus all variable costs
Net profit after ads
€1,208.68
Contribution margin − ad spend
ROI on ad spend
100.7%
POAS − 1
ROAS
8.33
Revenue ÷ ad spend
Break-even ROAS
4.15
Revenue ÷ contribution margin Break-even ROAS calculator
Target POAS
1.52
The POAS that keeps 10% of revenue excl. VAT as profit after ads.
Revenue excl. VAT
€8,264.46
Product gross profit
€3,140.50
Total variable costs
€731.82

POAS counts profit excl. VAT, so break-even is 1.0. ROAS and break-even ROAS use revenue incl. VAT, as in the break-even ROAS calculator; enter a VAT rate of 0% if your revenue is already excl. VAT.

The start values are illustrative data.

Formula

How do you calculate POAS? The POAS formula

POAS = (revenue excl. VAT − cost of goods − variable costs) ÷ ad spend

Variable costs are the costs that come with each order: shipping, payment and marketplace fees, returns. Leave out fixed costs such as rent and salaries. The part in brackets is your contribution margin in euros.

POAS = ROAS × contribution margin

Count ROAS on revenue excl. VAT and the contribution margin as a % of revenue excl. VAT. A ROAS of 4 at a 25% margin is a POAS of 1.0.

Worked example

Illustrative data. An example shop has €10,000.00 of revenue incl. 21% VAT and €1,200.00 of ad spend, a 40% product margin, a 5% return rate, 3% reverse logistics, 2.5% payment fees, and €800.00 of shipping cost against €500.00 collected from customers. These are the calculator's start values.

Worked example for the calculator's start values
StepCalculationResult
Revenue excl. VAT€10,000.00 ÷ 1.21€8,264.46
Revenue after returns€8,264.46 × (1 − 5%)€7,851.24
Cost of goods€7,851.24 × (1 − 40% margin)€4,710.74
Product gross profit€7,851.24 − €4,710.74€3,140.50
Payment fees€7,851.24 × 2.5%€196.28
Reverse logistics€7,851.24 × 3%€235.54
Net shipping cost€800.00 − €500.00 collected€300.00
Contribution margin€3,140.50 − €196.28 − €235.54 − €300.00€2,408.68
POAS€2,408.68 ÷ €1,200.00 ad spend2.01
Check: ROAS excl. VAT€8,264.46 ÷ €1,200.006.89
Check: contribution margin %€2,408.68 ÷ €8,264.4629.15%
Check: ROAS × contribution margin6.89 × 29.15%2.01

Each €1.00 of ad spend returned €2.01 of contribution margin: a POAS of 2.01. After the ads, €1,208.68 of profit is left before fixed costs, an ROI on ad spend of 100.7%.

Meaning

What does your POAS mean? 1.0 is break-even

Below 1.0 your ads cost more than the profit they bring. At 1.0 they exactly pay for themselves. Above 1.0, what is left is profit before fixed costs: (POAS − 1) × ad spend.

Profit after ads per €100 of ad spend, by POAS
POASProfit after ads per €100 of ad spend
0.8−€20
1.0€0
1.5+€50
2.0+€100
3.0+€200

Compared

POAS, ROAS and ROI side by side

POAS, ROAS and ROI on ad spend compared
MeasurePOASROASROI on ad spend
FormulaContribution margin ÷ ad spendRevenue ÷ ad spend(Contribution margin − ad spend) ÷ ad spend, or POAS − 1
What it countsRevenue minus cost of goods and all variable costsRevenue only, no costsProfit after ads, as a share of ad spend
Break-even1.01 ÷ contribution margin0%

Full explanation: POAS vs ROAS.

Google Ads

POAS in Google Ads: bidding on profit

There are two ways to bring profit into Google Ads.

  1. Route 1

    Send profit as the conversion value

    Report profit instead of revenue as the conversion value, then bid with Target ROAS. Google lets you define the value to maximise, such as sales revenue or profit margins. With profit as the value, a target ROAS of 100% is a POAS of 1.0 and 150% is a POAS of 1.5. Send profit excl. VAT after all variable costs to get POAS.

  2. Route 2

    Conversions with cart data

    Google’s own gross profit reporting uses conversions with cart data and a cost of goods sold value (cost_of_goods_sold) on each product in Merchant Center. Gross profit there is revenue minus cost of goods sold, so shipping, payment fees and returns are not subtracted. It is a first view of profit; POAS also counts those costs.

Google renamed “Maximize conversion value with a target ROAS” to “Target ROAS” from June 2026. Bidding works the same.

Google’s documentation:

Pitfalls

Three mistakes that inflate your POAS

  1. 1

    Gross profit instead of contribution margin

    Gross profit only subtracts cost of goods. Shipping, payment fees and returns come out of every order too. Illustrative data: on a €100.00 order with €45.00 of cost of goods, €8.00 of shipping, €3.00 of payment fees, a €4.00 return allowance and €20.00 of ad spend, gross profit gives a POAS of 2.75 and contribution margin gives 2.

  2. 2

    VAT in revenue

    VAT is not yours: you pass it on to the tax office. At 21% VAT, €121.00 of revenue is €100.00 of yours. On the illustrative order above, counting the full amount while keeping costs and ad spend unchanged adds €21.00 to the margin: a POAS of 2 reads as 3.05.

  3. 3

    Ignoring returns

    A refunded order has no margin, but the ad that sold it is still paid for. In the worked example, leaving out the 5% return rate lifts the POAS from 2.01 to 2.13.

Per product

Calculate POAS per product, not per account

A blended POAS averages products with different margins, so a profitable account can hide products that lose money on every sale. Work out the POAS of each product to see which ones to increase priority on and which to lower.

See the POAS of every product in your feed.Product Metrics works on ROAS right away and switches to POAS as soon as margins are connected.

POAS questions, answered.

How do you calculate POAS?

Divide your contribution margin by your ad spend. Contribution margin is revenue excluding VAT, minus cost of goods, shipping, payment fees and returns. €2,408.68 of margin ÷ €1,200.00 of ad spend = a POAS of 2.01.

What is the POAS formula?

POAS = (revenue excl. VAT − cost of goods − variable costs) ÷ ad spend. If you know your ROAS and margin: POAS = ROAS × contribution margin %. For example, a ROAS of 5 at a 30% margin gives a POAS of 1.5.

What is a good POAS?

Anything above 1.0 is profitable after ad costs, before fixed costs such as rent and salaries. A good target depends on the profit you want to keep and on whether the ads bring new customers. To cover overheads of 10% of revenue at a 40% margin you need a POAS of 1.33: margin ÷ (margin − overhead share). A product that wins repeat buyers can run close to 1.0 on the first order, because later orders add profit.

Is POAS the same as ROI?

No. ROI on ad spend = POAS − 1, so a POAS of 2.0 is an ROI of 100%. They contain the same information on different scales: POAS breaks even at 1.0, ROI at 0%.

Can I calculate POAS from ROAS?

Yes: POAS = ROAS × contribution margin, with ROAS counted on revenue excl. VAT. A ROAS of 4 at a 25% margin is a POAS of 1.0, exactly break-even.

Can I use POAS in Google Ads?

Yes. Send profit as the conversion value instead of revenue and bid with Target ROAS. A target ROAS of 100% then means a POAS of 1.0. Google’s own gross profit reporting only subtracts cost of goods sold, so shipping, fees and returns are still missing.

Why does POAS go down when I spend more?

Each extra euro buys less efficient clicks, so the average return falls even while total profit can still rise. Read POAS vs ROAS: a higher ratio can mean less profit.

Should POAS include VAT and returns?

Exclude VAT, because it isn’t yours. Subtract returns, because a refunded order has no margin. Both make your POAS lower but closer to your real profit.

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