# Churn Rate Calculator

> Customer churn rate is the share of customers who cancel in a period: customers lost / customers at the start x 100. Losing 18 of 400 customers is 4.5% monthly churn. Annual churn compounds - 4.5% a month is about 42.5% a year, not 54% - and average customer lifetime is 1 / churn, about 22 months.

Source: https://rankcert.com/tools/churn-rate-calculator
Free, no signup. Updated: 2026-10-29

## How to use it

1. Enter how many customers you had at the start of the month.
2. Enter how many of those customers cancelled during the month.
3. Read monthly churn, retention, compounded annual churn and average lifetime.

## Churn formulas

Do not count customers who signed up during the month in either number.

| Metric | Formula | Worked example |
| --- | --- | --- |
| Monthly churn | Customers lost / customers at start | 18 / 400 = 4.5% |
| Retention | 1 - churn | 1 - 0.045 = 95.5% |
| Annual churn | 1 - (1 - monthly churn)^12 | 1 - 0.955^12 = 42.5% |
| Average lifetime | 1 / monthly churn | 1 / 0.045 = 22.2 months |

## Questions

### What is a good churn rate for SaaS?

For small business customers, 3 to 5 percent monthly is common and under 2 percent is strong. Enterprise SaaS usually sees under 1 percent monthly because contracts are annual and switching costs are high.

### Why is annual churn not monthly churn x 12?

Because each month's churn applies to fewer remaining customers. 5% monthly churn is 46% a year when compounded, not 60%.

### Should new customers count in churn rate?

No. Use only the customers you had at the start of the period, and only the cancellations among them. Mixing in new signups makes churn look lower than it is.

### What is the difference between customer churn and revenue churn?

Customer churn counts accounts lost. Revenue churn counts MRR lost, including downgrades. If your largest customers stay and small ones leave, revenue churn is lower than customer churn.

### What is negative churn?

When expansion revenue from existing customers - upgrades, extra seats - exceeds the revenue lost to cancellations and downgrades. Your revenue from a cohort grows even as some customers leave.

### How do I reduce churn?

Find when customers leave. Churn in the first month usually means onboarding failed; churn after months of use usually means the product stopped solving the problem or a competitor did it better.

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