Free Retention Calculator
Retention Rate Calculator
Calculate customer retention rate, net revenue retention (NRR), or employee retention rate - with formulas, benchmarks, and the revenue impact of improving your rate.
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What is retention rate?
Retention rate is the percentage of customers, revenue, or employees that you keep over a given period. It is the inverse of churn rate - a 5% monthly churn rate equals 95% monthly retention. For SaaS businesses, retention is one of the most important metrics because it directly determines the ceiling of compounding growth.
There are three distinct retention metrics SaaS companies track: customer retention rate (how many accounts stayed), net revenue retention or NRR (how much revenue stayed, accounting for expansion and contraction), and employee retention rate (how many team members stayed). Each has its own formula and benchmark range.
Customer Retention Rate Formula
Customer Retention Rate Formula
CRR = ((Customers at End − New Customers) / Customers at Start) × 100
Also called: customer retention calculation · customer retention formula · retention calculation
Worked example
Start: 500 customers. End: 530. New customers acquired: 60.
Retained = 530 − 60 = 470
CRR = (470 / 500) × 100
= 94% monthly retention
= 6% monthly churn
Why subtract new customers?
New customers acquired during the period were not "retained" - they are new. If you count them in the ending total without subtracting, your retention rate is inflated. Only the customers you had at the start of the period can be retained or churned.
Retention rate vs churn rate
Retention Rate = 100% − Churn Rate. A 6% monthly churn rate equals 94% monthly retention. A 94% monthly retention rate compounds to approximately 50% annual retention - meaning you keep half your customers over a year. Use the churn rate calculator to see the compounding effect.
Net Revenue Retention Formula (NRR)
Net Revenue Retention Formula
NRR = ((Starting MRR + Expansion − Churned − Contraction) / Starting MRR) × 100
Also called: net dollar retention (NDR) · net revenue retention rate · NRR formula
Worked example
Starting MRR: $100k. Expansion: $15k. Churned: $8k. Contraction: $2k.
Ending = $100k + $15k − $8k − $2k
Ending MRR = $105k
NRR = ($105k / $100k) × 100
= 105% NRR
Why NRR matters more than CRR
NRR above 100% means your existing customer base grows revenue on its own - even if some accounts churn. At 120% NRR, you double revenue from the same cohort every 5 years without acquiring a single new customer. This is why investors prize NRR above almost any other metric.
Employee Retention Rate Formula
Employee Retention Rate Formula
ERR = ((Employees at Start − Employees who Left) / Employees at Start) × 100
Employee Turnover Rate = 100% − Employee Retention Rate
Worked example
Start of year: 200 employees. Employees who left: 18.
ERR = ((200 − 18) / 200) × 100
ERR = (182 / 200) × 100
= 91% employee retention
= 9% turnover rate
Voluntary vs involuntary turnover
Track voluntary and involuntary turnover separately. Voluntary turnover (resignations) reflects culture, compensation, and career growth. Involuntary turnover (terminations) reflects hiring quality and performance management. A 91% retention rate with 8% voluntary turnover is a different problem than 91% with 1% voluntary turnover.
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Frequently Asked Questions
What is the customer retention rate formula?
Customer Retention Rate = ((Customers at End of Period - New Customers Acquired) / Customers at Start of Period) × 100. You must subtract new customers acquired during the period before dividing, because they were not retained - they are new. Example: start 500, end 530, acquire 60 new → retained = 470 → CRR = (470 / 500) × 100 = 94%.
What is the net revenue retention formula?
NRR = ((Starting MRR + Expansion MRR - Churned MRR - Contraction MRR) / Starting MRR) × 100. NRR above 100% means you grow revenue from existing customers even without new sales. NRR is also called net dollar retention (NDR). Best-in-class SaaS companies achieve NRR of 120-130%+.
What is the employee retention rate formula?
Employee Retention Rate = ((Employees at Start - Employees who Left) / Employees at Start) × 100. This is the inverse of turnover rate. Example: start with 200 employees, 18 leave → ERR = ((200-18)/200) × 100 = 91%. A good annual employee retention rate is 90-95%+.
What is a good customer retention rate?
For SaaS, a good annual customer retention rate is 85-95%+. Enterprise SaaS targets 92-95%+. SMB SaaS considers 80-88% good. Monthly retention above 98% is excellent. The right benchmark depends on your customer segment - enterprise contracts retain better than SMB because of switching costs and longer contract terms.
What is a good NRR for SaaS?
A good NRR for B2B SaaS is 100-110%. Excellent NRR is 120%+. World-class NRR exceeds 130%. NRR above 100% means expansion revenue from upsells and seat additions offsets churn and contraction. This is the metric that allows SaaS companies to grow ARR significantly without proportional new customer acquisition.
How is retention rate different from churn rate?
Retention rate and churn rate are inverses of each other. Retention Rate = 100% - Churn Rate. A 5% monthly churn rate = 95% monthly retention. A 15% annual churn rate = 85% annual retention. Both describe the same performance - retention just focuses on what stayed while churn focuses on what left.
What is a good employee retention rate?
A good annual employee retention rate is 90-95%. Below 85% signals cultural, compensation, or management problems. High-performing teams in competitive industries target 90%+ as a baseline. Below 80% means replacing more than 1 in 5 employees every year - the productivity and knowledge loss compounds faster than hiring can keep up.