Free SaaS Churn Calculator
Customer Churn Rate Calculator
Calculate your monthly and annual customer churn rate, see how it compares to SaaS customer churn rate benchmarks, and understand the revenue impact on your business.
Enter your starting customers and churned customers to calculate your churn rate
SaaS Churn Rate Benchmarks
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What is churn rate?
Churn rate is the percentage of customers who cancel or stop using your product during a given period. It is one of the most critical SaaS metrics because it directly limits growth - a company with 10% monthly churn must replace all of its customers every 10 months just to stay flat.
Churn rate is also a leading indicator of product-market fit. When users genuinely find a product essential, they don't cancel. A flattening retention curve past month 3 - where a segment of users stabilizes and stays indefinitely - is the key PMF signal. If your retention curve keeps declining with no floor, your product hasn't found genuine fit with that cohort.
Churn Rate Formula
Customer Churn Rate Formula
Churn Rate = (Customers Lost / Customers at Start) × 100
Also called: customer churn formula · churn percentage formula · churn calculation formula
Worked example - monthly
You start January with 400 customers and lose 12 by month end.
Churn = (12 / 400) × 100
= 3% monthly churn
Worked example - annual
You start the year with 1,200 customers and lose 180 by year end.
Churn = (180 / 1200) × 100
= 15% annual churn
Important: what counts as "customers at start"
Do not subtract new customers acquired during the period. The customer churn rate formula uses only the customers you had at the beginning of the period as the denominator. New customers acquired mid-period are counted in the next period's starting base. Mixing them in deflates your churn rate and hides the true retention picture.
Find out why customers are churning and fix retention before it impacts your growth
Use our free churn survey template to collect feedback from churned customers, identify common reasons for cancellation, and uncover actionable insights to improve your product and reduce churn.
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How to Calculate Customer Churn Rate
The customer churn calculation is the same whether you are a B2B SaaS company, eCommerce subscription, or consumer app. The steps below walk through the full SaaS churn calculation with an example.
01
Define your measurement period
Choose monthly or annual. Monthly churn rate calculation gives you faster feedback and is the standard for SaaS. Annual churn rate is better for enterprise businesses with long contracts where a single month is too short to be meaningful.
02
Count customers at the start of the period
Record the number of paying customers on day 1 of the period - not the average for the period, and not including new customers acquired during the period. This is your denominator.
03
Count customers lost during the period
Count every customer who cancelled, did not renew, or stopped paying during the period. Do not net out new customers gained - you are calculating gross customer churn, not net churn.
04
Apply the customer churn formula
Churn Rate = (Customers Lost / Customers at Start) × 100. This gives you your churn percentage for the period.
05
Convert to annual if needed
If you calculated monthly churn, use the compound formula to find your annual equivalent: Annual Churn = 1 − (1 − Monthly Churn ÷ 100)¹². A 3% monthly churn rate compounds to 30.6% annually - not 36%, because each month's base is smaller than the last.
Full SaaS churn calculation example
850
Customers at start
34
Customers lost
60
New customers (ignore)
Customer churn rate = (34 / 850) × 100
= 4.0% monthly churn
Annual equivalent = 1 − (1 − 0.04)¹²
= 39.3% annual churn
Monthly to Annual Churn: Conversion Formula
Monthly churn and annual churn are not simply multiplied by 12. Monthly churn compounds - each month's base is smaller than the last, so the total annual loss is always less than 12× the monthly rate. Use the compound formula: Annual = 1 − (1 − Monthly ÷ 100)¹²
Monthly churn
Annual (compound)
Naive ×12 (wrong)
Benchmark
0.5%
5.8%
6%
Exceptional
1%
11.4%
12%
Excellent
2%
21.5%
24%
Good (SMB SaaS)
3%
30.6%
36%
Average
5%
46.1%
60%
Needs work
7%
57.8%
84%
Concerning
10%
71.8%
120%
Critical
The deceptive middle: A 2% monthly churn rate sounds manageable - but it means you lose 21.5% of your customer base every year. To keep 1,000 customers flat, you need to acquire 215 new ones annually just to replace those who left. That is why most healthy SaaS businesses target below 2% monthly as a hard floor.
Frequently Asked Questions
What is the customer churn rate formula?
Customer Churn Rate = (Customers Lost During Period / Customers at Start of Period) × 100. This is also called the customer churn formula or churn percentage formula. Use the number of customers at the very start of the period as your denominator - do not include new customers acquired during the period. Example: 34 customers lost from a starting base of 850 = (34 / 850) × 100 = 4% monthly churn.
How do I convert monthly churn to annual churn?
Annual Churn = 1 − (1 − Monthly Churn ÷ 100)¹². Do not multiply by 12 - monthly churn compounds because each month's base is smaller than the last. A 2% monthly churn rate equals 21.5% annual churn (not 24%). A 5% monthly churn rate equals 46.1% annual (not 60%). Use the calculator above or the conversion table to find your annual equivalent.
What is a good annual churn rate?
A good annual churn rate for B2B SaaS is below 5–7%. Enterprise SaaS with long-term contracts should target below 5% annually. SMB-focused SaaS often sees 15–25% annually and considers below 12% good. Consumer SaaS churn runs much higher - 20–30% annually is common. Annual churn below 10% is the broadly cited enterprise standard, but the right benchmark is specific to your segment.
What is a good churn rate for SaaS?
Monthly churn below 2% is good for SMB SaaS; below 1% is excellent. Enterprise SaaS often achieves below 0.5% monthly churn due to annual contracts and high switching costs. Consumer SaaS typically runs 5–10% monthly. Annual churn below 10% is the standard enterprise benchmark.
What is churn percentage?
Churn percentage and churn rate are the same thing - both express the proportion of customers lost during a period as a percentage of the starting customer count. Churn Rate = (Customers Lost / Starting Customers) × 100. If you lost 20 out of 400 customers in a month, your churn percentage is 5%.
What is SaaS churn calculation vs general churn calculation?
The churn formula is the same for SaaS and non-SaaS businesses. SaaS churn calculation typically uses monthly periods and tracks subscription cancellations. Non-subscription businesses (eCommerce, retail) often measure churn differently - using repeat purchase rate or activity-based definitions (a customer who has not bought in 90 days is considered churned). SaaS monthly churn is standard because subscription revenue is predictable and each cancellation is clearly defined.
What is the difference between customer churn and revenue churn?
Customer churn measures the number of customers lost. Revenue churn (MRR churn) measures the revenue lost from those customers. They differ when churned customers pay different amounts. A startup losing its biggest enterprise account has a far bigger revenue churn than the customer count suggests.
How does churn rate relate to LTV?
LTV = ARPU / Monthly Churn Rate. Reducing churn from 5% to 2% increases LTV by 150% - more leverage than a price increase. Every point of churn reduction compounds over time through longer average customer lifespans.
How does churn relate to product-market fit?
High churn is one of the clearest signs of missing product market fit. If users genuinely can't live without your product, they don't cancel. A cohort retention curve that flattens past month 3 is the PMF signal - it means that segment has embedded your product in their workflow. A curve that keeps declining has no floor, meaning no real PMF in that cohort.
How do I reduce churn?
The highest-leverage actions: (1) Fix the activation gap - users who never reach the core value prop churn fast. (2) Narrow your ICP - stop selling to companies your product doesn't fit. (3) Add expansion paths - users who add more seats or features churn less. (4) Run regular PMF surveys - find which segments score 40%+ very disappointed and focus there.