ROI, or return on investment, is the simplest way to see whether money you put into something has paid off. This free calculator works out your net return in pounds, your ROI as a percentage, and, if you tell it how long the money was tied up, your annualised ROI so you can compare investments held for different lengths of time. Everything updates instantly as you type, and nothing you enter leaves your browser.
How to calculate ROI
ROI compares what you got back against what you put in. Follow three steps:
- Take the amount returned (the final value, or the total cash you got back).
- Subtract the amount invested (your original cost). This gives your net return.
- Divide the net return by the amount invested, then multiply by 100 to get a percentage.
A positive percentage is a profit; a negative one is a loss. ROI on its own ignores time, so a 30% return earned in one month and one earned over ten years look identical. That is where annualised ROI comes in.
The formula
The annualised figure uses compounding to spread the total return evenly across each year, giving you a fair like-for-like rate.
Worked example
You spend £1,000 and, two years later, it is worth £1,300.
Net return: £1,300 − £1,000 = £300
ROI: £300 ÷ £1,000 × 100 = 30%
Annualised ROI: (1,300 ÷ 1,000) ^ (1 ÷ 2) − 1 = 1.3 ^ 0.5 − 1 = 14.02% per year
So the headline return is 30%, but because the money worked for two years, the true yearly rate is about 14%. Always check the annualised figure when the time periods differ.
A quick tip on what to include
For an honest ROI, put the net amount returned into the returned field, after any fees, commissions or tax. This calculator gives you the gross return on the numbers you enter, so the cleaner your inputs, the more useful the answer.
ROI on property, investments and marketing
The same ROI formula works whatever you are measuring - only the numbers you feed in change. Use this ROI calculator UK-wide for a quick answer, then adjust your inputs to suit the job:
- Property ROI: as a property ROI calculator, put your total purchase cost (deposit, fees, refurb) in the invested field and the resale value or net rental income in the returned field. For a buy-to-let, investment property ROI is often shown as yearly rental profit divided by the cash you put in, so add the period to see it annualised.
- Investments: use the amount you paid for the shares, fund or asset against its current value. Annualised ROI matters most here, as it lets you compare holdings owned for different lengths of time.
- Marketing ROI: as a marketing ROI calculator, invested is your ad or campaign spend and returned is the revenue (or profit) it generated. It is the fastest way to see which channels actually pay their way.
In every case the ROI formula is the same: net return divided by cost, times 100. The cleaner your figures, the more honest the answer.
Frequently asked questions
What is ROI?
ROI (return on investment) is a percentage that shows how much you gained or lost relative to what you put in. You work it out by taking the amount you got back, subtracting the amount you invested, dividing by the amount you invested, then multiplying by 100. A positive figure is a profit and a negative figure is a loss.
How do I calculate ROI?
Use ROI = (amount returned − amount invested) ÷ amount invested × 100. For example, if you invest £1,000 and get £1,300 back, your net return is £300 and your ROI is 300 ÷ 1,000 × 100 = 30%.
What counts as a good ROI?
It depends on the risk, the time period and what else you could have done with the money. As a rough guide, long-run stock market returns average around 7 to 10% a year before inflation, so many investors treat that as a benchmark. A short project returning 30% in a few weeks is very different from 30% over ten years, which is why annualised ROI matters.
What is the difference between ROI and annualised ROI?
Plain ROI ignores time, so 30% over one year and 30% over five years look the same. Annualised ROI spreads the total return across the number of years using compounding, giving a per-year rate so you can compare investments held for different lengths of time fairly.
How is annualised ROI calculated?
Annualised ROI = (amount returned ÷ amount invested) ^ (1 ÷ number of years) − 1, then multiplied by 100. For £1,300 back on £1,000 invested over 2 years, that is 1.3 ^ 0.5 − 1 = 14.02% per year.
Does this ROI calculator account for tax, fees or inflation?
No. It gives you the gross ROI based on the figures you enter. For a true picture, put your net amount returned after fees and tax into the returned field, and remember that inflation reduces the real value of any gain over time.
How do I calculate ROI on a property?
Use this property ROI calculator by entering your total cost in the invested field (deposit, legal fees and any refurbishment) and the sale value or net rental income in the returned field. ROI = (amount returned − amount invested) ÷ amount invested × 100. For investment property ROI on a buy-to-let, add how long you held it and check the annualised figure to compare it fairly against other years.
How do I work out marketing ROI?
As a marketing ROI calculator, put your campaign or ad spend in the invested field and the revenue (or profit) it generated in the returned field. The same ROI formula applies: net return ÷ spend × 100. So £2,000 of ad spend that brings in £5,000 is a £3,000 net return and a 150% ROI.
