Churn Rate Calculator Formula
Understand the math behind the churn rate calculator. Each variable explained with a worked example.
Formulas Used
Churn Rate
churn_rate = customers_start > 0 ? (customers_lost / customers_start) * 100 : 0Retention Rate
retention_rate = customers_start > 0 ? ((customers_start - customers_lost) / customers_start) * 100 : 0Customers Remaining
customers_remaining = customers_start - customers_lostVariables
| Variable | Description | Default |
|---|---|---|
customers_start | Customers at Start of Period | 1000 |
customers_lost | Customers Lost During Period | 50 |
How It Works
How to Calculate Churn Rate
Formula
Churn Rate = (Customers Lost / Customers at Start) x 100 Retention Rate = 100 - Churn Rate
Churn rate is the inverse of retention. It tells you what fraction of your customer base walks away during a given period (usually monthly or annually). Even small differences in churn compound dramatically: a company with 3% monthly churn loses roughly 31% of customers yearly, while 5% monthly churn means losing over 46% annually.
Worked Example
A subscription business starts the month with 1,000 customers and loses 50.
- 01Churn Rate = (50 / 1,000) x 100 = 5%
- 02Retention Rate = 100 - 5 = 95%
- 03Customers Remaining = 1,000 - 50 = 950
Frequently Asked Questions
What is a good churn rate?
For B2B SaaS, monthly churn below 1% (roughly 12% annually) is considered healthy. For B2C, 3-5% monthly churn is common. The best companies achieve negative net churn by expanding revenue from existing customers faster than they lose it.
Should I track monthly or annual churn?
Track both. Monthly churn gives you real-time feedback on retention efforts. Annual churn paints the big picture. Be careful converting between them: annual churn is not simply monthly churn times 12 due to compounding.
Learn More
Guide
Understanding SaaS Metrics
A comprehensive guide to SaaS metrics including MRR, ARR, churn rate, LTV, CAC, and the Rule of 40. Learn what to track and how to benchmark your SaaS business.
Ready to run the numbers?
Open Churn Rate Calculator