Churn Rate Formula Calculator
The simple churn rate formula plus an instant calculator. Plug in customers at start and customers lost, and see your monthly and annualized churn rate.
Calculate churn rate
Monthly churn rate
5.00%
Compounded over 12 months, that's an annual churn of 45.96%.
50 / 1000 × 100 = 5.00%
The formula
Churn Rate = (Customers Lost / Customers at Start) × 100
Pick a fixed period (a month, a quarter, a year). Count how many customers were active at the start. Count how many of them cancelled or were involuntarily churned during the period. Divide.
Example calculation
You start January with 1,000 active customers. By the end of January, 50 of them have cancelled. New signups don't count for churn, only the original cohort.
- 50 / 1000 = 0.05
- 0.05 × 100 = 5%
- Monthly churn rate = 5%
- Annualized: 1 - (1 - 0.05)^12 ≈ 46%
Common mistakes
- Adding new signups to the denominator. Always use the cohort that existed at the start of the period.
- Multiplying monthly churn by 12. That overstates annual churn. Use the compound formula instead.
- Mixing customer churn and revenue churn. They are different metrics. Calculate both, but never average them together.
- Excluding involuntary churn. Failed payments are still churn. If you only count voluntary cancellations, you underreport the leak.
How it works
This calculator uses the basic churn rate formula and, for monthly periods, applies the standard compound projection (1 - (1 - r)^12) to estimate the annual equivalent. It does not store any data.
When to use this
Use this calculator anytime someone hands you a churn number you need to verify, or when you want the math behind the percentage. For a fuller breakdown with revenue churn and benchmarks, use the Churn Rate Calculator.
What to do next
Calculating churn tells you the size of the leak. Recovering it means understanding why customers left and acting on it. Start with the free Churn Leak Report to map cancellations, failed payments, and win-back opportunities from real Stripe or Lemon Squeezy data.
Frequently Asked Questions
What is the churn rate formula?
Churn rate equals customers lost during a period divided by customers at the start of the period, expressed as a percentage. If you started the month with 1,000 customers and lost 50, your monthly churn rate is 5%.
How do you calculate churn rate over a year?
Annual churn rate is calculated with compounding: 1 - (1 - monthly churn rate)^12. A 5% monthly churn rate becomes roughly 46% annual churn, not 60%. The compound formula accounts for the fact that each month you are losing customers from a smaller base.
Should I include new customers in churn rate?
No. The standard formula only uses customers who existed at the start of the period. Adding new customers to the denominator hides the leak. Calculate them separately as a retention or growth metric.
What is a healthy SaaS churn rate?
Under 1% monthly is healthy for enterprise SaaS. 1-2% is typical mid-market. 3-5% is SMB. Above 5% monthly is leaking. The right number depends on your segment, pricing, and what you sell.
How ChurnNote helps
Calculating churn is useful. Recovering it is better.
ChurnNote connects to Stripe or Lemon Squeezy and automatically captures cancellation reasons, recovers failed payments, and queues win-back emails. So you stop losing revenue silently.
Start recovering churnNext step
Turn your churn rate into a shareable leak report
The Churn Leak Report turns the same numbers into a public page you can share, plus a list of customers worth winning back.
Related tools