Free tool

CAC payback period calculator.

How many months until a customer has repaid what you spent to get them. This one accounts for churn, which most payback calculators do not: a channel with strong day-one economics and heavy cancellation can never pay back at all, and a simple division will not tell you that.

Your numbers

$

Everything you spend to acquire customers in a month.

Paying customers, not signups.

$

Your blended monthly price.

%

Revenue left after hosting, payment fees and support.

%

Share of customers who cancel each month.

Customer acquisition cost

$50.00

Spend divided by customers

Payback, churn adjusted

2.1 months

When the money is actually back

Lifetime value

$410.83

Gross profit over the whole lifetime

LTV to CAC

8.2 : 1

Anything above 3 is healthy

Cumulative gross profit per customer 24 months
Cumulative gross profit per customer over 24 months against the acquisition cost line. acquisition cost month 2.1 month 0 month 24

Every customer costs $50.00 and contributes $24.65 a month. With 6% monthly churn they pay you back on month 2.1, and are worth $410.83 over an average lifetime of 16.7 months. That is comfortable: you can put the money straight back into acquisition.

The arithmetic

Nothing here is hidden.

Customer acquisition cost

Marketing spend divided by the paying customers it produced. Not signups. If you count signups your CAC will look wonderful and mean nothing.

Monthly gross profit per customer

Average revenue per customer multiplied by gross margin. Gross profit, not revenue, because serving a customer is not free.

Simple payback

Acquisition cost divided by monthly gross profit. This is the number most calculators give you, and it assumes nobody ever cancels.

Churn-adjusted payback

Each future month is discounted by the chance the customer is still there, so month 6 counts for less than month 1. When total lifetime value never reaches acquisition cost, the answer is "never", which is the honest result.

Lifetime value

Monthly gross profit divided by monthly churn. A 6% churn rate means an average lifetime of about 16.7 months.

One thing this cannot do from a form: give you a different answer per channel. Blended CAC across every channel at once is the number that hides the problem, because the channel that pays back in two weeks and the one that never does average into something that looks fine.

Questions

Payback, asked plainly.

What is CAC payback period?
CAC payback period is the number of months it takes for a customer to repay what you spent to acquire them, counted in gross profit rather than revenue. If a customer costs $50 to acquire and contributes $25 a month after costs, the simple payback is 2 months. It is the single most useful number for deciding whether you can afford to spend more on a channel.
How do you calculate CAC payback period?
Divide customer acquisition cost by monthly gross profit per customer. CAC is your marketing spend for a period divided by the customers it produced. Monthly gross profit per customer is average revenue per customer multiplied by your gross margin. The honest version also accounts for churn, because customers who cancel stop contributing, which is what this calculator does.
What is a good CAC payback period?
For a bootstrapped or self-funded product, under 6 months is comfortable and under 3 months means you can reinvest almost immediately. Venture-backed SaaS often accepts 12 to 18 months because the cash to bridge it exists. If you are funding growth out of revenue, your payback period is effectively how fast your marketing budget recycles, so shorter is worth more than it looks.
Why does churn change the payback period?
Because a customer who cancels stops paying. Simple payback assumes everyone stays for the whole period, which overstates fast-churning channels badly. This calculator discounts each future month by the chance the customer is still there, so if lifetime value never reaches acquisition cost the answer is "never", which is the correct answer and the one a simple division hides.
Should I use revenue or gross profit for payback?
Gross profit. Revenue ignores what it costs you to serve the customer: hosting, payment processing, support, third-party APIs. For most software the gross margin is 70 to 90 percent, so the difference is real but not dramatic. Payment processing alone is around 3 percent.
Is CAC payback the same as ROAS?
No, and the difference matters. ROAS is a ratio measured at a point in time, usually on the day of the click. Payback is a duration, and it accounts for money arriving over the following months and for customers leaving. A channel can have a strong day-one ROAS and never pay back, if the customers it brings churn quickly.

A blended payback number across all your channels is the one that hides the problem. The useful version is one payback number per channel, recalculated as the money actually arrives. That is what Ripples does. One script tag, your billing provider and your Google Ads account, and these numbers are computed from real data instead of typed in from memory.

See how that works

Other free tools

UTM builder LTV:CAC ratio calculator ROAS calculator Retention curve calculator

Payback per channel, from your real data.

Connect Stripe and Google Ads once. Free until $1K MRR.