Instagram Ads ROAS Calculator
Enter spend, CPM, CTR, conversion rate and margin to see break-even ROAS, profit per sale and true CAC.
Written against
- · Income Tax Act / Excise Tax Act — HST at 13% in Ontario
- · Competition Act — misleading representations, drip pricing, substantiation
1. Input cells
- · Average order value (excluding HST — HST collected is not revenue)
- · Cost of goods sold per order, shipping, packaging, payment processing (~2.9% + $0.30)
- · Ad spend, CPM, CTR, landing page conversion rate
- · Repeat purchase rate and 12-month customer lifetime value
2. Calculated outputs
| Output | Formula |
|---|---|
| Gross margin $ | AOV − COGS − shipping − processing |
| Gross margin % | Gross margin $ ÷ AOV |
| Break-even ROAS | 1 ÷ gross margin % |
| Target ROAS | Break-even ROAS × 1.3 |
| Impressions | (Spend ÷ CPM) × 1000 |
| Clicks | Impressions × CTR |
| Orders | Clicks × conversion rate |
| CPA | Spend ÷ orders |
| Profit | (Orders × gross margin $) − spend |
| Max allowable CPA | Gross margin $ × 0.7 |
| LTV:CAC | 12-month LTV ÷ CPA |
3. Decision rules
- · LTV:CAC below 3:1 — fix margin or retention before scaling
- · CPA above max allowable CPA — the offer or the landing page is the problem, not the ad
- · Profitable but small — increase budget 20% every 3 days
- · Profitable and capped — expand audiences or add a second platform
4. Ontario tax note
- · Model revenue net of the 13% HST you collect and remit; including it inflates ROAS
- · Advertising spend is a deductible business expense; the HST paid on Canadian ad invoices may be recoverable as an input tax credit if you are registered
- · Keep monthly ad platform invoices for six years
This template is provided for general business use and reflects Ontario and federal Canadian requirements as commonly applied. It is not legal, tax or clinical advice. Confirm current requirements with Ontario.ca, your local public health unit or municipality, the Ministry of Labour, Immigration, Training and Skills Development, the CRA, WSIB and your professional regulator, and have high-risk documents reviewed by a licensed Ontario lawyer or accountant before use.