SaaS Churn Rate Calculator
Customer churn metrics.
Calculate SaaS monthly and annualised churn rate, lost MRR, and average customer lifetime from start-of-period and end-of-period customer counts.
What this tool does
This calculator estimates key SaaS subscription metrics from three core inputs: customers at the start of a period, the number who churned, and average revenue per customer. It returns monthly and annualised churn rates, revenue impact of churn, and estimated average customer lifetime. Monthly churn rate is calculated by dividing churned customers by starting customers; annualised churn models cumulative loss over twelve months; lifetime value estimates how long a typical customer relationship lasts based on observed churn patterns. The most influential inputs are your starting customer count and churn volume—small changes in either shift the lifetime calculation noticeably. A typical use case is tracking subscription health month-to-month or modelling the revenue effect of losing a specific cohort. Note that this tool assumes constant churn rates and does not account for seasonal variation, customer acquisition costs, or non-recurring revenue.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Monthly churn is the percentage of customers who cancel each month. Divide cancellations by the month-start count. A 3% monthly churn sounds small but annualises to 31% - a third of the customer base gone every year. Below 1% monthly is excellent, 1-3% is healthy, 3-5% is stretched, above 5% a SaaS is usually in trouble.
Starting with 1,000 customers and losing 30 during the month = 3% churn. Annualised that's 30.6% customer loss. At 50 average MRR per customer, lost MRR is 1,500/month or 18k/year. Average customer lifetime is 1/churn = 33 months or 2.8 years.
Churn compounds fast. A SaaS adding 100 new customers/month with 5% churn on a 1,000 customer base nets only 50 new customers (100 gross - 50 churned). At 2% churn, the same 100 gross becomes 80 net. The churn rate change from 5% to 2% triples sustainable growth rate.
Run it with sensible defaults
Using customers start of month of 1,000, customers churned of 30, avg mrr per customer of 50, the calculation works out to 3.00%. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Customers Start of Month, Customers Churned, and Avg MRR per Customer — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
How the math works
Monthly churn = churned ÷ start × 100. Annualized = 1 - (1 - monthly)^12. Lifetime = 1 ÷ monthly churn.
Using this as a check-in
Re-run this every three months. A single reading tells you where you stand; four readings tell you whether things are improving. The trend matters more than any individual snapshot.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
30 customers churned ÷ 1,000 starting = 3.00%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator computes monthly churn rate by dividing the number of customers lost during a period by the number of customers at the period's start, then multiplying by 100 to express the result as a percentage. Annualized churn applies the monthly rate across twelve consecutive months, using the formula 1 − (1 − monthly churn)^12, which models churn as occurring consistently each month. Customer lifetime is estimated by taking the reciprocal of the monthly churn rate, treating churn as a constant hazard rate. The model assumes churn occurs uniformly throughout the period, does not account for seasonal variation, and does not model win-back, reactivation, or changes in the customer base due to new acquisitions.
References
Frequently Asked Questions
What's a good monthly churn rate?
Is revenue churn more important than logo churn?
Why annualize differently?
How do I reduce churn?
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