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The average churn rate for SaaS is not one number. Published benchmarks run from under 2% to well over 30%, because some count customers and others count revenue, and some measure a month while others measure a year. A figure only helps you once you know its basis and whether the companies behind it look like yours.
This guide puts three published benchmark sets side by side with the basis of each, shows how to convert monthly churn to annual churn, and gives the formulas for working out your own. Retention is also the first thing we check in a startup scaling strategy, because growth that leaks customers costs more with every stage.
What is the average churn rate for SaaS?
There is no single average. Each SaaS churn rate benchmark describes one group of companies, measured one way. The table shows three published sets as of November 2026, each with its sample and basis. All three come from vendors or lenders reporting on their own customers or survey respondents.
| Source | Sample | Basis | Figure |
|---|---|---|---|
| Recurly, July 2026 data | Software businesses on its billing network | Subscribers lost; labelled annual | Median 3.04%; top quartile 1.78% or below |
| ChartMogul, 2023 report | Over 2,100 SaaS businesses | Customers kept over 12 months | Top quartile keeps 85.7% above $500 a month, 63.1% below $10 |
| SaaS Capital, 2025 survey | Private B2B SaaS, contracts of $25,000 to $50,000 a year | Revenue kept over 12 months, net | Median 102%; top quartile 111%; lowest quartile 97% |
Read as churn, the ChartMogul row means a top-quartile company selling above $500 a month still loses 14.3% of its customers in a year, and one selling below $10 a month loses 36.9%. Those two figures are calculated here as 100% minus the retention rate. The SaaS Capital row is net revenue, so a figure above 100% means upgrades outweighed the revenue that left.
Why SaaS churn benchmarks disagree
SaaS churn benchmarks disagree because they measure different things. Before you compare your number with a published one, check four points.
- The period. A monthly rate and an annual rate are different numbers for the same business. The next section shows the conversion.
- The unit. Customer churn, also called logo churn, counts accounts. Revenue churn counts dollars. Losing one large account moves the second far more than the first.
- Gross or net. Gross figures count only what was lost. Net figures add upgrades from the customers who stayed, so they can pass 100%.
- The sample. A benchmark built on $10-a-month consumer plans says little about a product sold on annual contracts.
The Recurly row shows why this matters. Recurly's churn rate benchmarks label the 3.04% median as annual. ChartMogul's top-quartile companies lose at least 14.3% of customers a year. Two figures that far apart are not measuring the same thing, so confirm the period and the unit before you use either one as a target.
Monthly vs annual churn: the conversion
Monthly churn compounds, so the annual figure is smaller than twelve times the monthly one. The formula is annual churn = 1 − (1 − monthly churn)12. The table applies it to five monthly rates and shows how many of 100 customers are left after a year. Every figure in it is calculated, not taken from a survey.
| Monthly churn | Lost each month | Lost in a year | Left of 100 |
|---|---|---|---|
| 0.5% a month | 1 in 200 | 5.8% a year | 94 customers |
| 1% a month | 1 in 100 | 11.4% a year | 89 customers |
| 2% a month | 2 in 100 | 21.5% a year | 78 customers |
| 3% a month | 3 in 100 | 30.6% a year | 69 customers |
| 5% a month | 5 in 100 | 46.0% a year | 54 customers |
The conversion runs the other way too. A business that loses 10% of its customers in a year is losing about 0.87% a month. Keep both forms in view: a monthly rate that looks small can describe a company replacing nearly a third of its customers every year.
How to calculate churn rate for SaaS
Customer churn rate is the customers you lost in a period divided by the customers you had at its start. Count only customers who were there on day one, and leave out anyone who joined during the period.
Revenue needs its own formulas, and a full SaaS churn calculation uses all four below. Monthly recurring revenue (MRR) is the base for each one:
- Customer churn rate = customers lost in the period ÷ customers at the start
- Gross revenue churn rate = MRR lost to cancellations and downgrades ÷ MRR at the start
- Gross revenue retention (GRR) = 1 − gross revenue churn rate
- Net revenue retention (NRR) = (starting MRR − lost MRR + expansion MRR from the same customers) ÷ starting MRR
Take an invented example. A product starts the month with 200 customers and $50,000 of MRR. Six customers cancel, taking $1,000 with them. Downgrades remove another $500, and upgrades from existing customers add $2,000.
- Customer churn is 6 ÷ 200, or 3%.
- Gross revenue churn is $1,500 ÷ $50,000, also 3%, so GRR is 97%.
- NRR is ($50,000 − $1,500 + $2,000) ÷ $50,000, or 101%.
The same month reads as 3% churn or 101% retention depending on the measure. NRR above 100% is sometimes called negative churn. SaaS Capital's retention benchmarks treat churn as 1 minus gross retention and point out that gross retention cannot pass 100%. Recurly adds that customer churn and MRR churn can diverge: a 3% customer churn rate could sit beside 5% MRR churn if the accounts that leave are larger than average.
Two mistakes distort the figure most often. The first is mixing plans. A customer on an annual contract cannot leave until renewal, so a monthly rate across both plan types understates the risk. The second is a small base. With 40 customers, one cancellation is 2.5%, and a single month proves little.
What is a good churn rate for SaaS?
A good churn rate for SaaS is one that beats companies selling at your price point, measured on the same basis. Price is the strongest dividing line in the published data, so start there and ignore blended averages.
The ChartMogul SaaS Retention Report, published in November 2023, splits its sample by average revenue per account (ARPA). Above $500 a month, top-quartile companies keep 85.7% of customers over 12 months and the leaders keep more than 93.1%. Below $10 a month, the top quartile keeps 63.1% and the leaders more than 74.9%.
SaaS Capital makes the same point from a lender's side. Its 2025 survey of private B2B companies benchmarks by annual contract value (ACV), on the grounds that companies with a similar selling price have the most in common. For contracts of $25,000 to $50,000, the median NRR is 102%.
Recurly offers bands of its own. On its network, churn below 2% is strong, 2% to 4% is where most well-run subscription businesses sit, and anything above 5% is worth investigating. Recurly labels these bands annual and counts subscribers, so apply them only to a figure measured the same way.
Your own trend is the other half of the answer. A rate that falls with each new group of customers says more about the product than any single comparison with a benchmark.
Voluntary vs involuntary churn
Voluntary churn is a customer choosing to cancel. Involuntary churn is a customer lost because a payment failed. They have different causes and different fixes, so track them separately.
Recurly's data shows how much price changes the mix. In its cohort with average revenue per customer of $250 or more, involuntary churn is 0.18%. At $10 to $25 it is 1.30%, and that band also has the highest overall median in Recurly's table, at 4.29%.
For a low-priced product, failed payments can be a large share of the customers you lose. That part is a billing problem: retry rules, card updates and reminder emails. It needs no change to the product, and it is often the cheapest churn to recover.
What your churn rate tells you about scaling
Churn tells you whether growth is real before you spend on more of it. If customers leave as fast as marketing brings them in, a bigger budget grows the cost and leaves revenue where it was.
ChartMogul's report puts numbers on the link. Businesses in its sample with net retention above 100% grew 43.6% a year on average. Those with net retention below 60% grew 13.1%.
High early churn usually points back to fit, and our guide on how to find product market fit covers the retention signals to check first. Churn that rises after a price change is a pricing question, covered in our guide to SaaS pricing strategy and in our pricing strategy consulting. If nobody in the team owns one number for retained value, choosing a north star metric is a sensible first step.
How we check retention before a scale plan
We start every scale plan by checking that the growth is real. That means reading your retention data on a stated basis, by customer group and by plan, before anyone discusses hiring or spending.
Then we find the first bottleneck and plan the team, process and systems work in the order you need it. Every engagement is under an NDA, and the IP is always the customer's. The full approach is on our page for Startup scaling strategy and scale planning.
Frequently asked questions
What is the average churn rate for SaaS?
No single figure exists. Published benchmarks differ by period, unit and price point. In ChartMogul's 2023 report, top-quartile companies selling above $500 a month kept 85.7% of customers over 12 months, which is 14.3% annual churn. Top-quartile companies selling below $10 a month kept 63.1%, which is 36.9% annual churn.
What is a good churn rate for SaaS?
A good rate beats companies at your price point on the same basis. Compare annual with annual and customers with customers. Higher-priced B2B products keep more customers than low-priced consumer plans in every published set, so a blended average misleads both. Your own trend across customer groups matters as much as any benchmark.
How do you calculate churn rate in SaaS?
Divide the customers lost in a period by the customers you had at the start of it. Leave out customers who joined during the period. For revenue, divide the recurring revenue lost to cancellations and downgrades by the recurring revenue at the start. State the period every time you quote the result.
How do you convert monthly churn to annual churn?
Use annual churn = 1 − (1 − monthly churn) to the power of 12. Monthly churn compounds, so 1% a month is 11.4% a year and 3% a month is 30.6% a year. Multiplying the monthly rate by twelve overstates the annual figure, and the gap widens as churn rises.
What is the difference between customer churn and revenue churn?
Customer churn counts accounts lost. Revenue churn counts recurring revenue lost. They diverge when the customers who leave are larger or smaller than average. Recurly's example is a business with 3% customer churn and 5% revenue churn, because the accounts it lost were worth more than a typical one.
Is 5% monthly churn bad for SaaS?
For most products, yes. Compounded, 5% a month is 46.0% a year, so the business replaces almost half its customers every twelve months just to stand still. Low-priced consumer subscriptions run closer to that level than B2B products do. Check first how much of it comes from failed payments.
What is net revenue retention?
Net revenue retention (NRR) is the share of recurring revenue you keep from existing customers over a period, after cancellations, downgrades and upgrades. It can pass 100% when upgrades outweigh losses. SaaS Capital's 2025 survey reports a median of 102% for private B2B companies with contracts of $25,000 to $50,000.
