Calculate ROI, annualised return, and total profit on any Australian investment — shares, property, super, business, or other assets.
| Metric | Value |
|---|
| Investment type (Aus, 20-yr avg) | Avg annual return |
|---|---|
| ASX 200 shares (total return) | ~9–10% p.a. |
| Residential property (capital only) | ~6–7% p.a. |
| Superannuation (balanced fund) | ~7–8% p.a. |
| High interest savings | ~2–5% p.a. |
| Bonds / term deposits | ~3–5% p.a. |
ROI measures the profitability of an investment relative to its cost. It answers the core question: for every dollar invested, how much did you gain? ROI is expressed as a percentage and is one of the most widely used financial metrics for comparing investments, evaluating business decisions, and assessing project viability.
| Investment | Initial Cost | Final Value | Net Gain | ROI | Time |
|---|---|---|---|---|---|
| ASX shares | $20,000 | $32,000 | $12,000 | 60% | 5 years |
| Melbourne house (capital gain only) | $700,000 | $980,000 | $280,000 | 40% | 5 years |
| Term deposit | $50,000 | $62,813 | $12,813 | 25.6% | 5 years (5%/yr) |
| Business equipment | $30,000 | $95,000 (revenue) | $65,000 | 217% | 3 years |
A 60% ROI sounds excellent — but means very different things over 2 years versus 10 years. To compare investments accurately, annualise the ROI using the CAGR formula:
| Total ROI | Over 2 years | Over 5 years | Over 10 years |
|---|---|---|---|
| 60% total ROI | 26.5% p.a. | 9.9% p.a. | 4.8% p.a. |
| 100% total ROI | 41.4% p.a. | 14.9% p.a. | 7.2% p.a. |
| 200% total ROI | 73.2% p.a. | 24.6% p.a. | 11.6% p.a. |
What is a good ROI for investments in Australia?
It depends entirely on the asset class, time period, and risk level. Australian shares have historically returned approximately 9-10% p.a. total ROI (annualised). Residential property in capital cities has returned approximately 7-9% p.a. combining capital growth and rental yield. A term deposit at 5% is an excellent risk-free ROI in the current environment. Always compare like-for-like by annualising ROI.
What is the ROI formula?
ROI (%) = [(Final Value - Initial Cost) ÷ Initial Cost] × 100. For example, buying shares for $10,000 and selling for $13,500: ROI = ($3,500 ÷ $10,000) × 100 = 35%. This simple formula does not account for the time period — use annualised ROI (CAGR) to compare investments held for different durations.
How is ROI different from return rate?
ROI is a total percentage gain (e.g. 60% over 5 years). Annual return rate (p.a.) is the equivalent compound rate per year that produces that total ROI. A 60% total ROI over 5 years equals approximately 9.9% p.a. annual return. Always specify the time period when quoting ROI, or use annualised rates for comparison.
Does ROI include tax in Australia?
The basic ROI formula doesn't include tax — it shows pre-tax return. For Australian investors, the real after-tax ROI depends on: marginal income tax rate on interest or rental income, CGT (with 50% discount if held 12+ months), and whether the investment is negatively geared. The after-tax ROI is always lower than the pre-tax figure.