SaaS Pricing Calculator
SaaS (Software as a Service) businesses live and die by their unit economics. Monthly Recurring Revenue (MRR), customer lifetime value (LTV), customer acquisition cost (CAC), and churn rate are the fundamental metrics that determine whether a SaaS business is healthy and scalable. This calculator computes these metrics from your subscription price, customer count, monthly churn rate, and customer acquisition cost, and benchmarks your LTV:CAC ratio and CAC payback period against SaaS industry standards to help founders, product managers, and investors assess business health.
SaaS unit economics formula
MRR = customers * ARPU
ARR = MRR * 12
avg_lifetime_months = 1 / (monthly_churn/100)
LTV = ARPU * avg_lifetime_months * (gross_margin/100)
CAC_payback = CAC / (ARPU * gross_margin/100)
LTV:CAC = LTV / CAC
SaaS unit economics benchmarks
- LTV:CAC ratio of 3:1 or higher is considered healthy; below 1:1 means you are losing money on each customer acquired.
- CAC payback below 12 months is excellent; 12-18 months is acceptable; above 24 months requires attention.
- Monthly churn below 2% is good for SMB SaaS; below 0.5% for enterprise.
- Net Revenue Retention (NRR) above 100% means expansion revenue exceeds churn - a strong growth signal.
- Gross margins above 70% are typical for software-heavy SaaS; below 50% may indicate infrastructure cost issues.
Frequently asked questions
What is MRR and how is it calculated?
MRR (Monthly Recurring Revenue) is the predictable monthly revenue from active subscriptions. MRR = number_of_customers * average_monthly_revenue_per_customer. It excludes one-time payments, setup fees, and variable usage charges. MRR is the primary health metric for SaaS businesses.
What is LTV and why does it matter?
LTV (Lifetime Value) is the total revenue expected from a customer over their entire relationship with the company. LTV = ARPU / churn_rate (where churn_rate and ARPU are both monthly). A healthy SaaS business targets LTV:CAC ratio of at least 3:1, meaning each customer generates at least 3x what it cost to acquire them.
What is a good monthly churn rate for SaaS?
For B2B SaaS targeting SMBs, monthly churn of 2-4% is typical. Enterprise-focused SaaS should target below 1% monthly churn. Annual churn for enterprise SaaS of 5-8% is considered acceptable; below 5% is excellent. Net revenue retention above 100% (expansion revenue exceeding churn) is a sign of a very healthy SaaS business.
What is CAC payback period?
CAC payback period is the number of months required to recover the customer acquisition cost from gross profit. CAC payback = CAC / (ARPU * gross_margin_%). Best-in-class SaaS companies have payback periods below 12 months. Above 18 months is a concern, as it means significant capital is tied up in customer acquisition before becoming profitable.
What is the Rule of 40 for SaaS?
The Rule of 40 states that a healthy SaaS company's growth rate percentage plus profit margin percentage should equal or exceed 40. For example, a company growing at 30% with a 15% profit margin scores 45 - above 40, which is positive. High-growth early-stage companies may score above 40 on growth alone; mature companies should balance growth with profitability.
Official sources
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.