What This Calculator Does
Churn rate measures the percentage of customers or revenue a subscription business loses over a given period. It is the single most important health metric for any recurring revenue model, because it determines whether the business is a bucket that fills or a bucket that leaks. This calculator handles both flavors: logo churn (customer count) and revenue churn (dollars). For each, it computes gross churn, net churn (after new acquisitions offset losses), retention rate, and annualized churn using compounding math. Enter your monthly numbers and you get the full picture in seconds.
The distinction between gross and net churn matters enormously. Gross churn tells you how much you are losing, full stop. Net churn tells you the net effect after new customers or expansion revenue offset the losses. A company with 5% gross monthly churn but 6% monthly growth from new logos has negative net churn, meaning the base is growing. The same 5% gross churn with no new acquisition is a 5% monthly bleed. Reporting only one number hides half the story. This calculator shows both.
Churn ties directly into the value of each customer and the overall revenue base. To see how churn affects your recurring revenue movements, use our MRR / ARR Calculator. For the long-term profit each customer generates before churning, our Customer Lifetime Value Calculator ties churn to dollar value. And to understand how churn interacts with your cash position, our Burn Rate Calculator shows runway.
Inputs Required
The calculator has two modes. Choose the one that matches what you track.
Customer (Logo) Churn Mode
- Customers at Start of Period: Active customer count at the beginning
- Customers at End of Period: Active customer count at the end
- Customers Lost During Period: How many cancelled
- New Customers Acquired: How many new customers joined, used for net churn
Revenue Churn Mode
- Recurring Revenue at Start: MRR or ARR at the beginning of the period
- Recurring Revenue at End: MRR or ARR at the end
- Revenue Lost to Churn & Contraction: Dollars lost from cancellations and downgrades
- New & Expansion Revenue: Dollars gained from new customers and upgrades, used for net revenue churn
Outputs Provided
- Gross Churn Rate: Lost customers or revenue divided by the starting base
- Net Churn Rate: Lost minus new, divided by the starting base. Can be negative if growth exceeds losses
- Retention Rate: The percentage of the starting base kept, which is 100% minus gross churn
- Annualized Gross Churn: The monthly rate compounded over 12 months, showing the true annual impact
- SaaS Benchmarks: Reference ranges by customer segment for comparison
How the Calculation Works
Gross Churn Rate = (Lost / Starting Base) x 100
Net Churn Rate = ((Lost - New) / Starting Base) x 100
Retention Rate = ((Starting Base - Lost) / Starting Base) x 100
Annualized Gross Churn = (1 - (1 - Monthly Rate)^12) x 100
The annualization formula uses compounding, not simple multiplication. A 3% monthly churn rate is not 36% annual. It is (1 - 0.97^12) = 31%, because each month the base is smaller. This is a common error that overstates annual churn. Recurly's July 2026 subscription benchmark report makes this point explicitly: a 2% monthly rate is about 22% annual, not 24%. The calculator does the compounding for you.
Net churn can be negative, and for healthy SaaS businesses it often is. If expansion revenue from existing customers exceeds churn and contraction, the installed base grows without any new logos. This is called negative net churn, and it is the gold standard. Benchmarkit's 2026 report puts median net revenue retention at 102% for B2B SaaS, meaning the median company has 2% negative net churn. Top quartile companies reach 118% to 120% NRR.
How to Use the Calculator
- Choose customer (logo) churn or revenue churn mode, depending on what you track
- Enter your starting count or revenue for the period, usually one month
- Enter the ending count or revenue
- Enter how many customers or how much revenue you lost during the period
- Enter how many new customers or how much new and expansion revenue you gained
- Review gross churn, net churn, retention, and the annualized figure
- Compare your result to the SaaS benchmarks shown, matched to your segment
Example Calculations
Example 1: SMB SaaS Logo Churn
An SMB SaaS company starts the month with 1,000 customers, ends with 960, lost 50 to churn, and acquired 10 new. Gross churn is 50 / 1,000 = 5%. Net churn is (50 - 10) / 1,000 = 4%. Logo retention is 95%. Annualized gross churn is (1 - 0.95^12) = 46%, meaning at this rate nearly half the customer base turns over in a year. That fits the SMB SaaS segment, where monthly churn of 3% to 5% is typical, but it is on the high end. The company should investigate whether churn is voluntary (product dissatisfaction) or involuntary (failed payments).
Example 2: Mid-Market Revenue Churn
A mid-market SaaS company starts the month with $200,000 in MRR, ends with $198,000, lost $12,000 to churn and contraction, and gained $10,000 from new and expansion revenue. Gross revenue churn is $12,000 / $200,000 = 6%. Net revenue churn is ($12,000 - $10,000) / $200,000 = 1%. Revenue retention is 94%. Annualized gross churn is (1 - 0.94^12) = 54%, which is high. But the net churn of 1% monthly annualizes to about 11%, much more manageable. The expansion revenue is doing real work offsetting the gross losses.
Real World Scenarios
Separating Voluntary from Involuntary Churn
A B2C subscription app sees 7% monthly logo churn and assumes users hate the product. After segmenting the churn, the team finds 2.8 points are involuntary (failed credit card payments) and 4.2 points are voluntary cancellations. Recurly's July 2026 data shows involuntary churn averages about 1% monthly across subscription businesses, so 2.8% is high. The team implements dunning management (automated retry of failed payments and card update emails) and cuts involuntary churn from 2.8% to 0.9% within two months. Total churn drops from 7% to 5.1% without any product changes. The calculator lets them track the impact month over month as the dunning improvements take hold.
The Compounding Cost of High Churn
Two SaaS companies both add 100 new customers per month. Company A has 2% monthly churn. Company B has 5% monthly churn. After 24 months, Company A has about 3,700 customers. Company B has about 1,770. The 3-point difference in monthly churn produces a 2x difference in customer base after two years, because churn compounds. Every customer lost is not just a lost month of revenue but a lost lifetime of revenue. The team at Company B uses the calculator to model the impact of reducing churn from 5% to 3% and finds it would add nearly 1,000 customers over two years at the same acquisition rate. That insight shifts investment from acquisition to retention.
Negative Net Churn Through Expansion
An enterprise SaaS company has 1% monthly gross revenue churn but 3% monthly expansion revenue from existing customers adding seats and upgrading tiers. Net revenue churn is 1% - 3% = negative 2%. The installed base grows 2% per month without any new logos. Annualized, that is about 27% growth from expansion alone. SaaS Capital's 2026 survey puts median net revenue retention at 103% for private B2B SaaS, so this company at 102% NRR (negative 2% monthly net churn) is right at the median. The calculator confirms that the expansion engine, not new sales, is the primary growth driver, which changes how the company allocates its go-to-market budget.
Common Mistakes to Avoid
- Multiplying monthly churn by 12 for annual: Churn compounds. A 3% monthly rate is 31% annual, not 36%. Always use the compounding formula or this calculator. Simple multiplication overstates annual churn by 5 points at a 3% monthly rate
- Mixing logo and revenue churn: Losing one large customer can spike revenue churn while barely moving logo churn. Track both, and know which one you are reporting. Investors usually weight revenue churn more heavily because it reflects dollar impact
- Ignoring involuntary churn: Failed payments cause 20% to 40% of all churn in many subscription businesses. It is a billing problem, not a product problem, and it is fixable with dunning management. Segment your churn before drawing conclusions about product quality
- Comparing to the wrong benchmark: Enterprise SaaS runs under 0.5% monthly churn. SMB runs 3% to 5%. B2C runs 6% to 8%. Comparing your 4% SMB churn to an enterprise benchmark is misleading. Match the benchmark to your segment and ARR band
Limitations of This Calculator
This calculator uses a simple period-over-period churn formula. It does not handle cohort-based churn, which tracks groups of customers acquired in the same period over time and is the gold standard for understanding retention curves. It does not distinguish between voluntary and involuntary churn, which require separate tracking in your billing system. The annualization assumes the monthly rate stays constant, which rarely holds in reality as churn usually decreases for older cohorts. The benchmarks shown are 2026 directional ranges from multiple sources (Recurly, ChartMogul, SaaS Capital, Benchmarkit) and vary by sample, period, and definition. For detailed retention analysis, use dedicated tools like ChartMogul, ProfitWell, or Baremetrics that track cohort retention curves.
Authoritative Research & Resources
- Investopedia - Churn Rate - A clear definition of churn rate, the formula, and how it applies to subscription and telecom businesses.
- Recurly - 2026 Subscription Churn Benchmarks - Recurly's July 2026 benchmark report covering 2,200+ subscription businesses, with voluntary and involuntary churn breakdowns by vertical.
- SaaS Capital - 2026 B2B SaaS Benchmarks - SaaS Capital's annual survey of over 1,000 private B2B SaaS companies, reporting GRR and NRR benchmarks by company size and segment.