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Churn Rate Calculator — Monthly, Annual, and Lifetime
Customer churn or revenue churn. Outputs monthly churn rate, annual churn compounded properly, retention rate, average customer lifetime, and a health verdict for B2B SaaS.
How churn rate is calculated (and the mistake most teams make)
Churn rate is the percentage of customers (or revenue) you lose in a given period. The math looks trivial, but two pitfalls trip up most teams: confusing customer churn with revenue churn, and multiplying monthly churn by 12 to get annual churn (wrong).
The formulas
customer churn = customers lost / customers at start of period revenue churn = MRR lost / MRR at start of period annual churn = 1 − (1 − monthly_churn)^12 ← compounded, not 12 × monthly retention rate = 1 − churn rate avg lifetime = 1 / monthly_churn (in months)
Why annual churn is NOT 12 × monthly churn
If you lose 3% of customers in month 1, in month 2 you only have 97% left to lose 3% from — so you do not lose another 3 percentage points, you lose 3% of 97% = 2.91 points. Compounded over 12 months, 3% monthly churn = 30.6% annual churn, not 36%. This is the standard formula every SaaS investor uses.
What healthy churn looks like (2026)
- Enterprise SaaS: <1% monthly (under 12% annual). Multi-year contracts and high switching costs.
- B2B mid-market: 1–3% monthly (12–30% annual). Standard for annual contracts.
- B2B SMB / self-serve: 3–6% monthly (30–55% annual). High by enterprise standards but typical for the segment.
- B2C subscription: 5–10% monthly (40–70% annual). Driven by impulse-cancel behavior.
- Anything above 8% monthly: usually means PMF is incomplete or pricing is misaligned.
Customer churn vs revenue churn
Customer churn counts logos lost. Revenue churn counts MRR lost. Revenue churn is usually higher than customer churn (high-MRR customers churn at the same % rate but represent more revenue) — but if your big customers are stickier than small ones, revenue churn can be lower. Always report both.
How to calculate churn rate step by step
Two numbers + period length. Customer churn or revenue churn — pick the one that maps to the decision you are about to make.
Pick a period
Monthly for SMB SaaS, quarterly for enterprise. Avoid weekly — too noisy.
Count customers (or MRR) at start of period
Snapshot the first day. Do not use mid-period averages — they hide cohort dynamics.
Count what you lost
Cancellations + downgrades to free. Do not net out new signups — that is growth math, not churn math.
Read the verdict
Compare your number to the benchmark for your segment (above). Below benchmark? Investigate cohort retention. At benchmark? Healthy.
Project annual churn
The compounded annual number drives forecasting. Use it in valuation conversations, not the simple 12 × monthly version.
Frequently asked questions about churn rate
Depends on segment. Enterprise SaaS: under 1% monthly. B2B mid-market: 1-3% monthly. B2B SMB: 3-6% monthly. B2C subscription: 5-10% monthly. Anything above 8% monthly usually means product-market fit is incomplete or pricing is misaligned with the customer segment.
Both. Customer churn = logos lost. Revenue churn = MRR lost. They tell different stories. If revenue churn > customer churn, your bigger customers are leaving faster than small ones (worse). If revenue churn < customer churn, your small customers churn but big ones stay (better).
annual_churn = 1 − (1 − monthly_churn)^12. For 3% monthly, annual is about 30.6% (not 36%). This is the compounded formula and is what investors and SaaS metrics standards expect. Multiplying monthly × 12 overstates annual churn by 5-15%.
Gross revenue churn = lost MRR only (cancellations + downgrades). Net revenue churn = lost MRR minus expansion (upsells from existing customers). Net churn can go negative — meaning expansion exceeds losses — which is the gold standard for SaaS (NRR over 100%).
Most likely cohort dynamic — customers who failed onboarding cancel quickly, while customers who got value stick. This is normal and expected. Look at month-3 retention as the more reliable signal. If month-1 cancellations are above 10%, fix onboarding.
Yes — avg lifetime (months) = 1 / monthly_churn. For 3% monthly, average customer lifetime is 33 months. The calculator surfaces this directly. Note: this is the mean, not the median — for skewed distributions, the median can be much shorter.
