Calculate your return on investment (ROI), net profit, and annualised return (CAGR).
This calculator computes your return on investment (ROI) — the net profit as a percentage of total cost — and your annualised return (CAGR, or compound annual growth rate), which tells you what equivalent fixed annual return would have produced the same outcome over your investment period. It is useful for evaluating any investment with a known start cost and end value: shares, property, a business, or any other asset.
ROI expresses the net profit as a percentage of the total cost basis. CAGR is the constant annual growth rate that would produce the same final value from the same starting cost over the same period, accounting for compounding.
Formula: Total Cost = Initial Investment + Additional Costs. Net Profit = Final Value − Total Cost. ROI (%) = (Net Profit ÷ Total Cost) × 100. CAGR (%) = ((Final Value ÷ Total Cost)1 ÷ Years − 1) × 100.
Example: An A$10,000 investment with no additional costs that grows to A$15,000 over 5 years: Net profit = A$5,000. Total ROI = 50%. CAGR = (15,000 ÷ 10,000)1/5 − 1 = 1.50.2 − 1 = about 8.45% per year — meaning the equivalent of earning 8.45% compounding annually for 5 years. (Note: this example is for illustration purposes only.)
ROI is used across many contexts in Australia — from assessing the performance of an ASX share portfolio or an ETF, to evaluating whether a rental property has been a good investment, to benchmarking a business investment against alternative uses of the capital. When calculating property ROI, it is important to include all acquisition and holding costs in the cost basis: stamp duty (which in New South Wales, Victoria, and Queensland can add several per cent to the purchase price), legal and conveyancing fees, building and pest inspections, renovation costs, property management fees during the holding period, and council rates and insurance — not just the purchase price and sale price. Similarly for shares, brokerage on both the buy and sell transactions reduces net profit. Australian capital gains tax (CGT) is not modelled in this calculator — for investments held more than 12 months by an individual, a 50% CGT discount applies to the capital gain, meaning the effective tax is applied to half the net profit rather than the full amount. For investments held inside superannuation, the applicable CGT rate is 10% (one-third discount on the 15% super fund tax rate).
ROI (return on investment) is the total net profit as a percentage of the cost basis — it doesn't account for how long the investment took. CAGR (compound annual growth rate) is the equivalent constant annual return rate that would produce the same total result over the same period. CAGR is more useful for comparing investments of different durations: a 100% total ROI over 20 years (3.53% CAGR) is far less impressive than a 100% total ROI over 5 years (14.87% CAGR), even though the total return percentage is the same.
Yes — for a genuine measure of property investment ROI, all acquisition costs should be included: stamp duty, legal and conveyancing fees, building and pest inspection costs, and any other upfront costs. Excluding these (especially stamp duty, which can be several per cent of the purchase price in NSW and Victoria) overstates the true return and makes property appear more profitable than it actually was relative to alternatives.
No — this calculator compares the cost basis to the final capital value only. To include investment income received during the holding period (dividends from shares or net rent from property), add the total income received to the final value field. This gives you a total return (capital gain plus income) rather than a capital-only return.
This calculator shows gross (pre-tax) ROI. In Australia, a capital gain is assessable income. For individuals, if you held the asset for more than 12 months, only 50% of the capital gain is included in your taxable income (the CGT discount) — effectively halving your CGT liability. Your after-tax ROI will be lower than the gross figure shown here. For assets inside a superannuation fund, the fund pays 15% tax on capital gains (or 10% for assets held over 12 months, due to the one-third discount within super).
It depends on the investment type and risk. Long-run nominal returns from the ASX All Ordinaries (total return including dividends) have historically averaged around 9-10% per year, but with significant volatility. Australian residential property in capital cities has also historically delivered positive long-run returns, but when all costs (stamp duty, rates, maintenance, management fees) are accounted for, net returns are often lower than headline price growth figures suggest. Any investment offering returns significantly above long-run asset class averages typically comes with commensurate risk.
Yes — ROI is applicable to any scenario with a cost and a resulting value. For a business investment, enter the total invested capital as the initial investment, any additional costs incurred, and the current or sale value of the business (or the cumulative profit generated). For a renovation, enter the renovation cost and compare the property's value before and after — noting that property ROI calculations are more meaningful when the holding period and other property-related costs are also factored in.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. This calculator does not account for capital gains tax, income tax on investment returns, inflation, ongoing costs not entered by the user, or the time value of money beyond the CAGR calculation. Past investment performance is not a reliable indicator of future performance. Consult a qualified financial adviser and tax professional for advice specific to your investment circumstances.