Churn Rate Calculator
Monthly and annual churn plus retention.
Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths
Your values
ⓘ Live results
- Monthly churn
- 4.5%
- Annual churn
- 42.5%
- Revenue churn
- 4.29%
- Average lifetime
- 22.2 months
Quick answer
Customer churn rate is the number of customers lost during a period divided by the number you had at the start, times 100. Losing 63 of 1,400 customers in a month is 4.5% monthly churn. Annual churn is not 12 × monthly: it compounds as 1 − (1 − 0.045)¹² ≈ 42.5%. Average customer lifetime is 1 ÷ monthly churn, about 22 months.
What the Churn Rate calculator does
This calculator measures how fast a subscription or recurring-revenue business loses customers. From one month's starting customer count and cancellations it gives monthly churn, the equivalent annual churn, and the average customer lifetime; from starting and lost monthly recurring revenue (MRR) it gives revenue churn.
Count only customers who were active at the start of the month. Customers who sign up and cancel within the same month should be left out of both numbers, otherwise churn looks higher than it is for your established base. Revenue churn here is gross: it includes cancellations and downgrades but does not net off upgrades from remaining customers.
The annual figure assumes this month's rate holds all year. Churn is usually highest in a customer's first few months, so a single month's rate can mislead; tracking each signup cohort separately gives a truer picture. Feed the annual churn into the customer lifetime value calculator to see what a customer is worth.
The formula
Monthly churn = customers lost ÷ customers at start × 100 Annual churn = 1 − (1 − monthly churn)¹² Revenue churn = MRR lost ÷ MRR at start × 100 Average lifetime (months) = 1 ÷ monthly churn
| Symbol | Meaning | Unit |
|---|---|---|
| customers at start | Active paying customers on the first day of the month | count |
| customers lost | Of those, how many cancelled or lapsed during the month | count |
| MRR at start | Monthly recurring revenue on the first day | $ |
| MRR lost | Recurring revenue lost to cancellations and downgrades during the month | $ |
These are the standard subscription-business definitions used in SaaS reporting. Average lifetime from 1 ÷ churn assumes a constant churn rate (a geometric distribution of lifetimes). Some companies divide by the average of start and end customers instead of the start count; that gives a slightly different figure, so be consistent when comparing periods.
Worked examples
SMB software subscription
A scheduling app for small businesses starts the month with 1,400 paying customers and $42,000 MRR; 63 customers worth $1,800 MRR cancel.
Inputs
- Customers at start1400
- Customers lost63
- MRR at start42000 $
- MRR lost1800 $
Result
- Monthly churn4.5%
- Annual churn42.5%
- Revenue churn4.29%
- Average lifetime22.2 months
4.5% monthly churn compounds to 42.5% a year, and the average customer stays about 22 months. Revenue churn of 4.29% is slightly lower, so it is mostly smaller accounts leaving.
Enterprise B2B platform
A B2B data platform has 85 enterprise clients paying $510,000 MRR in total; one client paying $4,200 a month leaves.
Inputs
- Customers at start85
- Customers lost1
- MRR at start510000 $
- MRR lost4200 $
Result
- Monthly churn1.18%
- Annual churn13.2%
- Revenue churn0.82%
- Average lifetime85 months
Losing one client is 1.18% monthly churn, but only 0.82% of revenue. With so few customers a single cancellation swings the rate, so look at a rolling 12-month figure before drawing conclusions.
Consumer app subscription
A fitness app starts the month with 12,000 subscribers paying $180,000 MRR; 960 subscribers worth $13,900 cancel.
Inputs
- Customers at start12000
- Customers lost960
- MRR at start180000 $
- MRR lost13900 $
Result
- Monthly churn8%
- Annual churn63.2%
- Revenue churn7.72%
- Average lifetime12.5 months
8% monthly churn means 63.2% of subscribers are gone within a year and the average subscription lasts 12.5 months. At this rate the app must replace most of its base every year just to stand still.
Monthly to annual churn conversion
Multiplying monthly churn by 12 overstates annual churn because each month's losses come from a smaller base. The table uses 1 − (1 − m)¹² and the matching average lifetime.
| Monthly churn | Annual churn | Average lifetime |
|---|---|---|
| 0.5% | 5.8% | 200 months |
| 1% | 11.4% | 100 months |
| 2% | 21.5% | 50 months |
| 3% | 30.6% | 33 months |
| 5% | 46.0% | 20 months |
| 7% | 58.1% | 14 months |
| 10% | 71.8% | 10 months |
Customer churn, revenue churn and net revenue retention
- Customer (logo) churn counts accounts. It matters most when customers pay similar amounts.
- Gross revenue churn counts the MRR lost, including downgrades. It shows whether you are losing big or small accounts.
- Net revenue retention (NRR) adds upgrades and expansion from existing customers back in: (MRR at start − churned − downgraded + expansion) ÷ MRR at start. Above 100% means the existing base grows even without new sales, which is common in seat-based B2B software.
If customer churn is high but revenue churn is low, small customers are leaving; that may be acceptable if acquiring them is cheap. Track starting MRR and growth with the MRR and ARR calculator.
Where to look when churn is too high
- Early-life churn: if many cancellations come in the first one to three months, the problem is onboarding or a mismatch between what was sold and what was delivered.
- Involuntary churn: failed card payments can make up a large share of cancellations in consumer subscriptions. Card-updater services and payment retry emails recover some of them.
- Acquisition channel: customers won with deep discounts or from broad ad audiences often churn faster. Compare churn by channel against customer acquisition cost.
- Plan type: annual plans churn far less in-period than monthly ones, because customers can only leave at renewal.
How to use the Churn Rate Calculator
- 1Enter the number of paying customers active on the first day of the month.
- 2Enter how many of those customers cancelled or lapsed by the end of the month; leave out customers who joined and left within the month.
- 3Enter MRR at the start of the month and the MRR lost to cancellations and downgrades.
- 4Read monthly churn, the compounded annual churn, revenue churn and average customer lifetime.
Frequently asked questions
What is a good churn rate?
It depends on the market. Software sold to large businesses often sees monthly churn well under 1%, while products for small businesses and consumers commonly run at several percent a month; compare with businesses selling to similar customers at similar prices.
How do I calculate annual churn from monthly churn?
Use 1 − (1 − monthly churn)¹². For 3% monthly churn: 1 − 0.97¹² = 30.6%, not 36%.
What is the difference between churn rate and retention rate?
Retention is the opposite of churn: retention = 100% − churn for the same period. 4.5% monthly churn is 95.5% monthly retention.
Should new customers be included in the churn calculation?
Not in the starting count. Customers who join during the month were not at risk for the whole period, so including them distorts the rate; track their early cancellations separately.
Can revenue churn be negative?
Net revenue churn can be negative when upgrades from existing customers exceed lost revenue. That is the same as net revenue retention above 100% and is a strong sign of product-market fit.
References
- Marketing Metrics: The Manager's Guide to Measuring Marketing Performance (retention and churn) — Pearson (Farris, Bendle, Pfeifer and Reibstein)
About this calculator
- Built and reviewed by the Calculation Machine team · How we build and test calculators
- Last reviewed: October 24, 2026
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