SaaS payback windows should run under 12 months — see exactly where yours lands.
7 numbers, 90 seconds → your payback month, your LTV:CAC, and the one lever that moves it most.
Payback period
4.6 months
—No new customers this month — set at least one in the control bar below to draw the curve.
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View this as a month-by-month table instead
| Month | Surviving | Cumulative contribution | vs CAC |
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Most SaaS payback benchmarks quote a single number, but the real figure moves with every churn point, expansion dollar and pricing change.
Enter marketing spend, sales cost, new customers, ARPA, gross margin, churn and expansion. The tool builds a churn-adjusted cohort cash curve, not a single static ratio.
You get the exact month cumulative contribution margin crosses your acquisition cost. Blended and paid-only CAC, LTV with negative net churn handled explicitly, and the affordable CAC at any target payback window follow automatically.
- Calculate blended and paid-only CAC side by side.
- See the exact month your cohort's cash curve crosses its own CAC.
- Compare your LTV:CAC ratio against the 3:1 and 5:1 benchmark bands.
- Identify which lever — CAC, margin, price, or churn — moves payback the most.
- Find out the most you can pay for a customer at any target payback window.
90 seconds No signup Nothing leaves your browser
Where you stand
Six numbers, benchmarked
CAC
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—LTV
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—LTV : CAC
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—NRR, monthly
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—NRR, annualised
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—Avg. customer lifetime
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—Budget authorisation
The most you can pay for a customer
$0
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Stress test
Which lever actually moves payback
Four normal, plausible changes — not a disaster scenario. One of them moves payback more than the other three combined. One of them, on this formula, does not move it at all.
Methodology
How this is calculated
Published in full so you can check it, argue with it, or quote it. Nothing here is hard-coded except the benchmark bands, and those are named and dated below.
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Blended CAC, fully loaded
Add marketing spend to fully loaded sales cost — salaries, commission, and the tools that support the acquisition motion — then divide by new customers won in the same month. Counting only working media spend and leaving out people is the single most common way a payback number ends up looking healthier than the business really is.
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Contribution margin sets the payback line — deliberately without churn
Monthly contribution margin is ARPA × gross margin. Payback is CAC ÷ that number, on purpose without a churn term: payback answers how fast do I get the cash back, and the cash comes back at the same speed however long the customer eventually stays. Churn changes how much you get after payback, not how fast you get to it — see the stress test above for what that means in practice.
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The cohort cash curve accounts for the customers who do not make it
The headline figure assumes every acquired customer survives to repay their own CAC. Real cohorts thin out: each month, the surviving share shrinks by the logo churn rate, and the remaining accounts' revenue grows by the expansion rate. The chart sums that survival- and expansion-adjusted contribution month by month and marks the point cumulative contribution actually crosses the CAC line — which, once churn is running, lands later than the simple formula suggests.
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LTV is capped at 60 months, on purpose
LTV, churn-only, is monthly contribution ÷ churn rate; with expansion netted in, it is monthly contribution ÷ (churn − expansion). When churn is zero, or expansion is greater than or equal to churn, that denominator hits zero or goes negative and the formula wants to return infinity. This page never prints that. It runs the same cohort simulation used for the chart out to a 60-month horizon instead, and reports the bounded total — a number you could actually plan around, not a mathematical artefact.
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The affordable CAC panel inverts the model
Set a target payback window and the panel multiplies it by monthly contribution margin to show the most a customer can cost at that speed of return. It is the same formula as the headline figure, solved for CAC instead of for months — the number a growth lead can actually take into a channel-budget conversation.
Benchmark sources
- LTV:CAC health threshold — David Skok / Matrix Partners, "SaaS Metrics 2.0" (For Entrepreneurs), the widely cited origin of the roughly 3:1 framing repeated across venture and operator writing since the mid-2010s.
- CAC payback conventions — Bessemer Venture Partners' annual State of the Cloud reporting and ChartMogul's SaaS benchmark analyses, both of which put healthy payback under roughly 12 months for SMB/self-serve and up to roughly 18 months for enterprise motions.
- Net revenue retention bands — ICONIQ Growth's State of SaaS Benchmarks and Bessemer's State of the Cloud, which treat above-100% NRR as strong, above 120% as exceptional, and below 90% as a sign growth spend is mostly replacing churned revenue.
- Fully loaded CAC definition — OpenView Partners' SaaS benchmark writing on blended CAC, which includes sales and marketing headcount cost, not only working media spend.
These are widely repeated venture-capital and SaaS-operator conventions, not empirical laws, and they were built almost entirely on venture-backed subscription software. They travel badly to agencies, marketplaces and services businesses, where payback windows, margins and churn behave differently. A bootstrapped business optimising for cash should rationally target a shorter payback than a funded one chasing growth — nobody is subsidising the wait.
Questions people ask before they trust a payback number
What is a good CAC payback period?
Under roughly 12 months is the widely used threshold for healthy SMB and self-serve businesses; up to about 18 months is normal for enterprise sales motions with longer cycles and more stakeholders. These are venture and SaaS-operator conventions, not physical laws, and they travel badly outside venture-backed SaaS. A bootstrapped business optimising for cash should target a shorter window than either figure, because nobody is funding the wait.
How do you calculate LTV to CAC ratio?
Divide customer lifetime value by customer acquisition cost. CAC is (marketing spend plus fully loaded sales cost) divided by new customers; LTV is monthly contribution margin divided by net monthly churn, where net churn is logo churn minus expansion revenue. Roughly 3:1 is the widely cited health threshold: below 1:1 you lose money on every customer, and far above 5:1 usually signals underinvestment in growth rather than excellence.
Should CAC include salaries?
Yes, fully loaded. Sales and marketing salaries, commission, and the tools that support acquisition — ad platforms, SEO and content tools, a CRM, outbound tooling — all belong in the numerator, not just working media spend. Counting only ad spend understates CAC and produces a payback period that looks healthier than the business actually is, which is precisely the mistake this calculator is built to catch.
Why is my LTV:CAC ratio high but the business still out of cash?
Because LTV and CAC are paid on different clocks. CAC is spent in cash this month; LTV is future contribution margin that has not arrived yet and may take years to. A 6:1 ratio sitting on top of an 18-month payback period can still starve working capital, because the ratio measures eventual profitability while payback measures how long your cash stays tied up before it comes back.
What is the fastest way to shorten payback?
Cut CAC. In this model, payback equals CAC divided by monthly contribution margin (ARPA times gross margin), so a 15% cut to acquisition cost shortens payback further than a 5-point margin gain or a 10% ARPA increase — and churn does not move it at all. Churn determines how much a customer is worth over time, not how quickly that same customer repays their own acquisition cost.
Common follow-ups
Does anything I type into this tool get sent anywhere?
No. The calculator is a single JavaScript file running in your browser. There is no server call, no analytics event carrying your numbers, no account, and no storage. If you copy the result link, your inputs are encoded in the URL — treat that link the way you would treat the numbers themselves.
Is this LTV:CAC or CAC:LTV?
LTV:CAC — lifetime value divided by acquisition cost, so a higher number is better and 3:1 reads as "three dollars of value for every dollar spent." A few vendors invert the convention and report CAC:LTV instead, where lower is better. Check which one you are looking at before comparing numbers across tools.
What if I sell annual contracts, not monthly subscriptions?
Divide annual contract value by 12 and use that as ARPA. It is an approximation — annual contracts are usually paid up front, so the real cash timing is better than a monthly model shows, and this tool will understate how fast you actually recoup CAC on prepaid annual deals.
Does this work for usage-based or highly variable revenue?
Roughly. Use a trailing-twelve-month average as your ARPA input rather than a single recent month, since usage-based revenue swings more than seat-based subscriptions. The model still assumes a reasonably stable per-account average, which is the weakest assumption for a business with genuinely spiky usage.
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