CAC Payback Period Calculator
Find how long it takes to recover the cost of acquiring a customer.
What the CAC Payback Period Calculator does
Payback period is how many months of gross profit it takes to recover what you spent acquiring a customer. It matters more than LTV for cash planning, because it determines how fast you can reinvest in growth.
Formula
Monthly gross profit = Monthly revenue × Gross marginPayback period = CAC ÷ Monthly gross profit
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Customer acquisition cost | selected currency | Yes | Accepts more than 0. |
| Monthly revenue per customer | selected currency | Yes | Accepts more than 0. |
| Gross margin | % | Yes | — |
| Monthly churn rate | % | Optional | Optional — checks whether customers survive long enough. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Customer acquisition cost, Monthly revenue per customer and Gross margin.
- Optionally add Monthly churn rate.
- Select Calculate.
Worked example
A $900 CAC with $120 monthly revenue at 80% gross margin.
- CAC
- 900
- Revenue
- 120
- Margin
- 80
$96 monthly gross profit, so payback takes 9.4 months.
Frequently asked questions
What payback period is acceptable?
Under 12 months is the common SaaS benchmark. Beyond 18 months, growth consumes cash faster than most companies can fund without raising capital.