Churn Rate Calculator
This calculator converts customer loss data into churn rate, retention rate, and average customer lifespan. Enter the number of customers at the start of the period and the number of customers lost. Select the period length (monthly or annual) and the calculator computes the monthly churn rate, the compounded annual churn rate, the retention rate, and the implied average customer lifespan. These metrics are foundational for subscription businesses and SaaS models.
Churn rate formulas
Monthly churn = Customers lost / Customers at start of month
Annual churn = 1 - (1 - Monthly churn)^12
Retention rate = 1 - Churn rate
Avg customer lifespan (months) = 1 / Monthly churn rate
Why compounding matters
A 2% monthly churn rate does not equal 24% annual churn. Because you lose 2% of a smaller base each month, the compounded annual churn is approximately 21.5%. The formula 1 - (1 - 0.02)^12 gives the accurate figure. Always use the compounded formula for annual projections.
Churn rate calculator: frequently asked questions
What is churn rate?
Churn rate is the percentage of customers who stop doing business with you in a given period. Monthly churn = customers lost / customers at start of period. It is the inverse of retention rate.
How do you convert monthly churn to annual churn?
Annual churn = 1 - (1 - monthly churn rate) raised to the power of 12. A 2% monthly churn rate compounds to approximately 21.5% annual churn, not simply 24%.
What is the average customer lifespan?
Average customer lifespan = 1 / churn rate. If monthly churn is 5%, the average customer stays for 1 / 0.05 = 20 months. If annual churn is 25%, the average customer stays for 4 years.
What is a good churn rate?
For SaaS businesses, monthly churn below 2% (under 22% annually) is generally considered healthy. Enterprise software often achieves sub-1% monthly churn. Consumer subscription businesses typically see 5-10% monthly churn.
What is the difference between gross and net churn?
Gross churn measures only lost customers. Net churn subtracts expansion revenue from existing customers. Net revenue churn can be negative (good) if expansions outpace cancellations.
Official sources
- U.S. Small Business Administration: Managing business finances.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.