SaaS Churn Rate Calculator

The churn rate formula is straightforward. Take the number of customers you lost during a period, divide by the number you had at the start, and multiply by 100.

That gives you a percentage for whatever time window you're measuring. Most SaaS businesses track this monthly, but the same formula works for weekly, quarterly, or annual periods.

Say you started March with 500 active subscribers. By the end of the month, 25 had cancelled or let their subscriptions lapse. Your monthly churn rate:

Your retention rate is the inverse: 95%. Simple enough. But 5% monthly doesn't mean 60% annual. Churn compounds, and the difference matters more than most people expect.

A common mistake is multiplying monthly churn by 12. That overstates the number because it ignores compounding. If you lose 5% of customers each month, you're losing 5% of a shrinking base, not a fixed one.

The accurate formula uses compounding:

With our 5% monthly example:

That's 46%, not 60%. The naive method would have overstated annual churn by 14 percentage points. For quarterly numbers, the same logic applies: raise the retention rate to the power of 4.

Going the other direction, convert annual churn back to a monthly figure using the inverse:

This is useful when benchmarking reports quote annual figures and you need to compare against your monthly tracking. A 46% annual churn rate converts to roughly 5% monthly, which aligns with our earlier calculation.

This calculator measures customer churn: the percentage of subscribers who leave. Revenue churn (MRR churn) measures the percentage of recurring revenue lost. They're related but often tell different stories.

If your $9/month customers churn at twice the rate of your $99/month customers, your customer churn rate looks worse than your revenue churn. The reverse is also true, and arguably more dangerous: losing a handful of enterprise accounts can devastate MRR even if your overall customer count barely moves.

In practice, track both. Customer churn tells you about product-market fit across segments. Revenue churn tells you about financial health. Most SaaS dashboards in Stripe, Recurly, and Chargebee show both side by side. If you only track one, you're flying with one eye closed.

Churn directly determines customer lifetime value. At 5% monthly churn, the average customer stays 20 months. Drop that to 3% and they stay 33 months. That's a 65% increase in lifetime value from a 2-point reduction in churn.

A significant share of SaaS churn is involuntary: failed payments, expired cards, insufficient funds. We've seen this account for 20–40% of total churn across ChurnWard customers. It's recoverable through dunning and smart retries, which makes it the lowest-effort lever for improving your churn rate.

Looking for attrition rate instead? The formula is identical. Try our attrition rate calculator.