How do you calculate customer churn rate?

Customer churn rate is calculated by dividing the number of customers lost during a period by the number of customers at the start of that period, then multiplying by 100 to get a percentage. For example, losing 15 of 500 customers gives a 3% monthly customer churn rate.

What is the difference between customer churn and revenue churn?

Customer churn measures the percentage of customers who cancel, while revenue churn measures the percentage of recurring revenue lost. Revenue churn is usually more important because losing a few high-value customers can hurt more than losing many low-value ones. Revenue churn can be gross (churn only) or net (including contraction and expansion).

What is a good churn rate for SaaS?

For monthly customer churn, under 3% is healthy for SMB SaaS and under 1% is healthy for enterprise SaaS. Annual churn should be under 10%. Revenue churn should ideally be negative, meaning expansion revenue exceeds churn and contraction combined.

What is contraction churn?

Contraction churn (or contraction MRR) is revenue lost when existing customers downgrade their plan or reduce their number of seats, without fully cancelling. It is included in net revenue churn but is distinct from full churn where a customer leaves entirely.

Free SaaS Churn Rate Calculator

Calculate your customer churn rate and net revenue churn rate in seconds. Enter your numbers below — results update instantly and all calculations run in your browser.

Customer Churn Inputs

Customers at Start of Period

Customers Lost

Revenue Churn Inputs ($)

MRR at Start

MRR Lost to Churn

MRR Lost to Contraction

Customer Churn Rate

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Net Revenue Churn Rate

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† Net revenue churn includes both churned MRR and contraction MRR. Calculations run entirely in your browser — your data never leaves your device.

The Churn Formulas

Customer churn measures how many customers left, while revenue churn measures how much recurring revenue was lost. Both are typically calculated over a monthly period.

Customer Churn Rate

Customer Churn = (Customers Lost ÷ Customers at Start) × 100

Net Revenue Churn Rate

Revenue Churn = ((MRR Churned + MRR Contracted) ÷ MRR at Start) × 100

What a Good Result Looks Like

Lower is better for both churn metrics. For revenue churn, negative is the gold standard — it means expansion revenue outweighs your losses. The health indicators use these thresholds (monthly, SMB SaaS):

Healthy (green): Customer churn ≤ 3% and revenue churn ≤ 2% (or negative). Indicates a sticky product.
Caution (amber): Customer churn 3–5% or revenue churn 2–5%. Worth investigating retention triggers.
At risk (red): Customer churn > 5% or revenue churn > 5%. High churn can offset all new business growth.

For enterprise SaaS with annual contracts, target customer churn under 1% monthly and annual revenue churn under 10%.

Common Mistakes

Common Mistake

Confusing gross and net revenue churn. Gross churn counts only cancellations; net churn subtracts expansion revenue and is the number most operators track. Another frequent error is dividing by the end-of-period customer count instead of the start — the denominator should always be the starting base. Finally, mixing voluntary churn (cancellations) with involuntary churn (failed payments) hides the real problem: high involuntary churn usually points to billing or dunning issues, not product dissatisfaction.

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Free SaaS Churn Rate Calculator

The Churn Formulas

What a Good Result Looks Like

Common Mistakes

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