Churn Rate Calculator: Monthly, Annualized Churn and Customer Lifespan

What is churn rate?

Churn rate is the share of customers who cancel in a period. Losing 40 of 1,000 customers in a month is a 4% monthly churn rate. That is 96% retention and an implied lifespan of 25 months.

Compounded over a year, 4% a month is 38.7% annual churn, not 48%.

Churn rate = customers lost ÷ customers at start of period × 100

Annualized churn = 1 − (1 − monthly churn)^12

Implied lifespan (months) = 1 ÷ monthly churn

Example: 40 ÷ 1,000 = 4%. Annualized: 1 − 0.96^12 = 38.7%. Lifespan: 1 ÷ 0.04 = 25 months.

Counting lost customers the right way

Most online churn calculators ask for customers at the start, new customers, and customers at the end. They then treat start plus new minus end as "lost". That nets new signups against cancellations and understates churn in a growing business.

Count cancellations directly instead. Keep the rules consistent from month to month:

Denominator is customers at the start of the period only. New signups during the period do not count, in either number.
A cancellation counts in the period it takes effect, not the period the customer clicked cancel.
A failed renewal counts as lost once dunning ends, not on the first decline.
Downgrades and pauses are not churn. Track them separately as contraction.
Pick one period and keep it. The calculator converts quarterly and annual inputs to a monthly rate before annualizing.

What a churn rate means over a year

The monthly figure looks small until it compounds. A 5% monthly churn rate loses 46% of the base in a year. A 20% churn rate only works as an annual number; at 20% a month, four in five customers are gone within 12 months.

Monthly churn	Annual churn	Implied lifespan
1%	11.4%	100 months
2%	21.5%	50 months
3%	30.6%	33 months
5%	46.0%	20 months
7%	58.1%	14 months
10%	71.8%	10 months

Lifespan here is an average, not a promise. Half the customers leave before it, and the figure is only reliable once churn has been measured for at least a full year.

Customer churn vs revenue churn

Customer (logo) churn counts accounts. Revenue (MRR) churn counts dollars. It can be negative when upgrades outweigh cancellations. Enter revenue per customer in the advanced panel to see revenue lost next to the customer count.

Medida	Formula	Por que isso é importante
Customer churn	lost ÷ starting customers	health of the base
Gross revenue churn	MRR lost ÷ starting MRR	downside only
Net revenue churn	(MRR lost − expansion) ÷ starting MRR	can be negative in strong products

Churn benchmarks

SMB SaaS, monthly

3% to 7%

Mid-market SaaS, monthly

1% to 2%

Enterprise SaaS, annual

5% to 10%

Consumer subscriptions, monthly

5% to 10%

Subscription boxes, monthly

8% to 15%

Under 2% monthly is strong for any subscription business. Above 5% monthly, the average customer leaves inside 20 months. That caps LTV hard.

Voluntary vs involuntary churn

Voluntary churn is a decision: the customer cancels. Involuntary churn is a failed payment: an expired card, insufficient funds, or a chargeback on the renewal.

Recurly's network benchmarks (July 2026) put average churn at 3.27%, of which 1.25 points is involuntary. That is roughly a third of all churn, and it is the cheapest part to fix.

1.25%

involuntary churn, all industries

Recurly network medians, July 2026

1.69%

involuntary churn in education

highest of the tracked verticals

0.18%

involuntary churn above $250 ARPC

1.30% for $10 to $25 plans

Involuntary churn falls as the price per customer rises. Low-ticket consumer plans lose the most to expired cards and declines, so dunning and card updaters matter most there.

10%

Share of churned customers who left via a chargeback, default in the calculator

A disputed renewal cancels the subscription. It costs a $15 to $20 dispute fee and counts against your dispute ratio. Change the percentage in the advanced panel to match your processor data.

Network rules that cut subscription churn

Mastercard's subscription rules, in force since October 11, 2022, set a floor for every recurring merchant. Visa's rules for free trials and introductory offers work the same way. Merchants who meet them see fewer "cancelled recurring" and "unrecognized" disputes, and fewer customers who churn by calling their bank.

Send a receipt after every recurring charge, with the next billing date and how to cancel.
Send a notice at least 7 days before an annual or longer-interval renewal bills.
Offer an online cancellation method. A phone-only process is not compliant.
Confirm enrollment by email, including the trial end date and the first charge amount.
Keep the statement descriptor matching the brand name shown at checkout.

How to reduce churn

Fix failed payments firstSmart retries, card updater services and dunning emails recover 20% to 40% of failed renewals.
Send renewal remindersA reminder 7 days before an annual charge cuts "unrecognized charge" disputes. It also cuts the chargebacks they turn into.
Make cancellation easy and visibleHidden cancellation flows push customers to dispute instead of cancel. That costs more and hurts your dispute ratio.
Match the statement descriptor to your brandThe most common subscription dispute reason is a charge the customer did not recognize.
Act on usage drop-offCustomers who stop logging in churn within 60 days. A usage-triggered email beats a discount sent too late.
Track churn by cohort and planA single blended number hides a plan or channel that is leaking.

Perguntas frequentes

How do you calculate churn rate?

Divide customers lost in a period by customers at the start of the period, then multiply by 100. 40 lost from 1,000 is 4% churn.

What is a good churn rate?

Under 2% monthly is strong for SaaS. 3% to 7% is typical for SMB products. Consumer subscriptions often run 5% to 10%. Annual churn under 10% is strong for enterprise.

How do I convert monthly churn to annual churn?

Annual churn = 1 − (1 − monthly churn)^12. At 4% monthly that is 38.7%, not 48%. The base shrinks each month.

What is the difference between churn and retention?

Retention is 100% minus churn for the same period. 4% monthly churn is 96% monthly retention.

What is involuntary churn?

Customers lost to failed payments, not a decision to cancel. Think expired cards, declines and chargebacks on renewals. It is often a quarter or more of total churn and the easiest part to fix.

How do chargebacks relate to churn?

A disputed renewal ends the subscription. It adds a dispute fee and a hit to your dispute ratio. Merchants with hard-to-find cancellation flows see more of their churn arrive as chargebacks.

What does 5% churn mean?

Five of every 100 customers at the start of the period cancel during it. If the period is a month, 46% of the base is gone within a year and the average customer stays 20 months. If the period is a year, 5% is a strong result for most subscription businesses.

What does a 20% churn rate mean?

It depends on the period. 20% annual churn is normal for SMB SaaS and consumer apps. 20% monthly churn loses 93% of customers in a year, with an average lifespan of five months, which few businesses can outgrow.

Should new customers count in the churn rate?

No. Divide only by customers at the start of the period and count only cancellations. Calculators that net new signups against lost customers understate churn in a growing business and overstate it in a shrinking one.

What is net MRR churn?

Revenue lost to cancellations and downgrades, minus expansion revenue from existing customers, divided by starting MRR. It goes negative when upgrades outweigh losses. A product with 3% customer churn can still show negative net MRR churn.

Churn Rate Calculator