Churn Rate Calculator: 6 Worked Examples for SaaS
To calculate churn rate, divide the customers you lost in a period by the customers you had at the start, then multiply by 100. Lost 8 out of 160 = 8 / 160 = 5% churn. For revenue churn, do the same with MRR: churned MRR divided by MRR at the start.
You do not need a calculator app for that, but you do need the right inputs. Below are six worked examples covering the cases founders get wrong, with every step shown so you can plug in your own numbers.
What inputs does a churn rate calculator need?
Collect these for one period, usually a calendar month or a rolling 30 days:
| Input | Where to find it |
|---|---|
| Paying customers at the start | Active and past due subscriptions on day one, trials excluded |
| Customers who churned | Subscriptions that ended during the period |
| MRR at the start | Sum of monthly-normalized subscription value on day one |
| Churned MRR | MRR of the subscriptions that ended |
| Contraction MRR | MRR lost to downgrades from customers who stayed |
| Expansion MRR | MRR gained from upgrades from customers who stayed |
If MRR is new to you, our guide on how to calculate MRR from Stripe covers yearly plans, discounts and trials. The counting rules themselves are in the churn rate formula guide.
How do you calculate monthly customer churn?
Example 1: a simple month.
| Step | Value |
|---|---|
| Customers on the 1st | 160 |
| Cancelled during the month | 8 |
| Churn = 8 / 160 | 5.0% |
New customers who joined during the month do not enter the calculation, unless they also cancelled in the same month. Those “joined and churned” customers are usually left out of the numerator too, because they were never in the starting count.
Example 2: a month with a trial wave.
| Step | Value |
|---|---|
| Paying customers on the 1st | 160 |
| Trials running on the 1st | 40 |
| Paying customers who cancelled | 8 |
| Trials that ended without paying | 25 |
| Churn = 8 / 160 | 5.0% |
The 25 expired trials are a trial conversion problem, not churn. If you divided 33 by 200 you would report 16.5% churn, which tells you nothing useful about paying customers.
How do you calculate revenue churn?
Example 3: revenue churn lower than customer churn.
| Step | Value |
|---|---|
| MRR on the 1st | $2,400 |
| Customers on the 1st | 160 |
| Customers who left | 8, all on the $9 plan |
| Churned MRR = 8 × $9 | $72 |
| Customer churn = 8 / 160 | 5.0% |
| Revenue churn = 72 / 2,400 | 3.0% |
When the people leaving are on your cheapest plan, revenue churn sits below customer churn. If the opposite happens, look at your top accounts first.
How do you calculate gross and net MRR churn?
Example 4: downgrades and upgrades in the same month.
| Step | Value |
|---|---|
| MRR on the 1st | $2,400 |
| Churned MRR | $72 |
| Contraction MRR | $30 |
| Expansion MRR | $60 |
| Gross MRR churn = (72 + 30) / 2,400 | 4.25% |
| Net MRR churn = (72 + 30 − 60) / 2,400 | 1.75% |
Net churn can go negative. If expansion had been $120 instead of $60, net MRR churn would be (102 − 120) / 2,400 = −0.75%: existing customers grew the business even after cancellations.
How do you turn monthly churn into annual churn?
Example 5: compounding. Multiplying by 12 overstates it. Churn compounds, because each month you lose a share of a smaller base.
| Monthly churn | Customers kept after 12 months | Annual churn |
|---|---|---|
| 2% | 0.98¹² ≈ 78.5% | ≈ 21.5% |
| 3% | 0.97¹² ≈ 69.4% | ≈ 30.6% |
| 5% | 0.95¹² ≈ 54.0% | ≈ 46.0% |
| 7% | 0.93¹² ≈ 41.9% | ≈ 58.1% |
Formula: annual churn = 1 − (1 − monthly churn)¹². To go the other way: monthly churn = 1 − (1 − annual churn)^(1/12).
How do yearly plans change the calculation?
Example 6: a mix of monthly and yearly customers.
| Step | Value |
|---|---|
| Monthly customers on the 1st | 100 |
| Yearly customers on the 1st | 60 |
| Monthly customers who cancelled | 6 |
| Yearly renewals due this month | 5 |
| Yearly customers who did not renew | 1 |
| Blended churn = 7 / 160 | 4.4% |
| Monthly-plan churn = 6 / 100 | 6.0% |
| Yearly renewal rate = 4 / 5 | 80% |
The blended number hides two different behaviours. Yearly customers can only leave at renewal, so judge them by renewal rate. Track monthly-plan churn on its own.
How do these numbers compare with other SaaS products?
For a reference point, ChartMogul reports a median monthly customer churn of 6.1% for accounts paying under $25 a month and 2.2% above $500 (source). Our roundup of SaaS churn rate benchmarks explains how to compare fairly, and churn rate vs retention rate shows the flip side of each number.
FAQ
Why does Stripe show a different churn rate?
Stripe Billing uses its own definition: churned subscriptions in the past 30 days divided by active subscriptions 30 days ago plus new subscriptions in those 30 days (Stripe support). Adding new subscriptions to the denominator gives a lower rate than the start-of-period formula above, so compare like with like.
What period should I use?
A rolling 30 days or a calendar month. Keep it the same every time.
How do failed payments count?
A past due subscription is still a customer. Count it as churned only once the subscription ends.
My churn swings a lot. Is that normal?
With under 100 customers, yes. One cancellation is a full point or more. Look at three-month averages.
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