About this calculator
Monthly recurring revenue (MRR) is the predictable income your subscriptions bring in each month. Annual recurring revenue (ARR) is that figure over a year. They're the two numbers most subscription businesses track first.
Enter your number of customers and what each pays a month to get both figures. Add your monthly churn to see how much revenue you lose to cancellations, or switch modes to find how many customers a revenue goal needs.
Worked examples
Real numbers, worked out by the same calculator. Press “Use these numbers” to try one above.
250 customers paying £20 a month, 3% churn
- Monthly recurring revenue (MRR)
- £5,000.00
- Annual recurring revenue (ARR)
- £60,000.00
- Revenue lost to churn each month
- £150.00
- Average customer lifetime
- 33.3 months
250 customers paying £20.00 a month is £5,000.00 of MRR, which is £60,000.00 a year.
Customers needed for £10,000 a month at £20 each
- Customers needed
- 500
- Annual recurring revenue at target
- £120,000.00
To reach £10,000.00 a month at £20.00 per customer you need 500 customers.
80 customers at £49 a month
- Monthly recurring revenue (MRR)
- £3,920.00
- Annual recurring revenue (ARR)
- £47,040.00
80 customers paying £49.00 a month is £3,920.00 of MRR, which is £47,040.00 a year.
How they're calculated
MRR = paying customers × average monthly revenue per customer. 250 × £20 = £5,000.
ARR = MRR × 12. £5,000 × 12 = £60,000.
Customers needed = target MRR ÷ revenue per customer, rounded up. £10,000 ÷ £20 = 500.
With churn, average customer lifetime = 1 ÷ monthly churn. At 3% a month that's about 33 months.
What counts as recurring revenue
- Include: subscription fees and retainers you expect to continue. Annual plans count as one twelfth each month.
- Leave out: one-off fees such as set-up charges, one-time projects and usage that varies a lot from month to month.
- Use net figures. Take off discounts and refunds so the number reflects what you really receive.
MRR is not the same as money in the bank
MRR ignores when customers actually pay, so a business with many annual plans can have strong MRR and a lumpy bank balance. It's also a snapshot: a healthy-looking MRR can still be shrinking if churn is higher than new sign-ups. The subscription revenue calculator shows where sign-ups and churn take you over time.
Frequently asked questions
What is MRR?
Monthly recurring revenue: the income from subscriptions you can expect each month. It's customers multiplied by the average amount each pays monthly.
What is the difference between MRR and ARR?
ARR is MRR multiplied by 12. MRR is better for tracking growth month by month, and ARR is often used to describe the size of a business.
How do I include annual plans in MRR?
Divide the annual price by 12 and count that amount each month. A £240 annual plan adds £20 to MRR.
What is churn?
The share of customers who cancel in a period. A monthly churn of 3% means that out of every 100 customers, about 3 leave each month.
Should one-off fees be included?
No. MRR is for revenue that repeats. Set-up fees and one-off projects would make it look bigger and steadier than it is.
Formulas tested against hand-worked answers. Last reviewed 29 September 2026. These calculators do arithmetic only; they are not financial, tax or legal advice.