Figma 
Google Ads Price for a target margin
Price = (cost per customer + fixed fee per payment) ÷ (1 minus payment fee % minus target margin)
Only works when payment fee % plus target margin is below 100%. Otherwise no price can reach the margin.
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Search Console
SaaS pricing
Free SaaS Pricing Calculator
Work out what your SaaS product should cost. Enter your costs, margin goals and plan structure. See your price floor, target price, break even point and recurring revenue, with every formula shown.
- Updates as you type
- Runs in your browser
- Nothing is saved or sent
Compare
Pricing scenario comparison
Enter a monthly price per customer and the number of customers you expect at that price. A higher price usually means fewer customers, so set each count yourself. Costs come from your inputs above.
| Scenario | Monthly price | Paying customers | Annual price | MRR | Variable costs | Contribution | Contribution % | Operating profit |
|---|
Annual price uses your annual discount. Variable costs include payment fees. Operating profit subtracts all shared monthly costs once.
Plan design
Pricing tier builder
Design up to six plans and compare them side by side. The sample tiers are placeholders. Rename them and set your own prices, limits and customer counts.
Tier comparison
| Tier | Monthly price | Annual price | Revenue per customer | Cost and fees per customer | Contribution per customer | Contribution % | Customers | MRR | Setup fee |
|---|
Revenue per customer includes extra seat and usage charges, and the annual discount when billing is annual. Costs use the cost per customer, per seat and per unit from section 5.
Methodology
The formulas behind the calculator
All figures are per customer per month unless stated. Calculations use full precision. Only the displayed numbers are rounded.
Price floor
Price floor = (cost per customer + fixed fee) ÷ (1 minus payment fee %)
The price where each customer covers its own costs and fees, with zero margin left over.
Fully loaded break even price
Price = (cost per customer + shared costs ÷ customers + fixed fee) ÷ (1 minus payment fee %)
Covers every cost at your expected customer count. It changes when the customer count changes.
Contribution margin
Contribution = revenue per customer minus variable costs minus payment fees
Payment fees are counted once, here.
Gross margin
Gross margin = (MRR minus variable costs minus delivery costs) ÷ MRR
Delivery costs are hosting, database, third party services and support from section 4. Other operating expenses are left out.
Break even customers
Customers = shared monthly costs ÷ contribution per customer, rounded up
Shown only when contribution is above zero.
Recurring revenue
MRR = revenue per customer × customers. ARR = MRR × 12
Setup fees and other one time charges are left out. ARR assumes today’s revenue continues unchanged.
Annual billing
Annual price = monthly price × 12 × (1 minus discount). Monthly equivalent = annual price ÷ 12
The annual price is cash collected upfront. Accounting rules usually spread it over the year as revenue.
Usage pricing
Billable units = usage minus included units, never below zero. Charge = billable units × rate
Graduated bands charge each band’s rate only on the units inside that band.
Operating profit
Profit = MRR minus variable costs minus all shared monthly costs
Each cost is subtracted once.
CAC payback
Months = CAC ÷ monthly contribution per customer
Assumes contribution stays the same and ignores churn.
Value based price
Price = monthly customer value × share you capture
A starting idea to test with customers, not a proven price.
How payment fees are counted
With monthly billing, the percentage fee applies to each monthly payment and the fixed fee is charged 12 times a year. With annual billing, the fixed fee is charged once a year, so it adds one twelfth of the fee per month. If usage is billed monthly on top of an annual plan, one extra fixed fee is added for each monthly usage payment. Fees are counted once, inside variable costs.
What is SaaS pricing?
SaaS pricing is what customers pay for ongoing access to your software. Most SaaS companies charge a subscription, monthly or yearly.
Your price affects almost everything. It decides how much revenue each customer brings. It shapes who signs up and who stays. It sets how much you can spend to win a customer. And it decides whether the business makes a profit.
How to calculate a SaaS subscription price
There are three useful ways to look at a price. Use them together.
- Cost based price. The price that covers what it costs to serve one customer, including payment fees. This is your floor. Going below it loses money on every customer.
- Target margin price. The price that leaves the margin you want after costs. It shows what you need to charge for a healthy business.
- Market tested price. The price customers actually accept. You find it through customer interviews, competitor research and pricing tests.
A good price usually sits above your target margin price and within what customers are willing to pay. If the market price is below your cost based price, the plan needs to change, not just the number.
Common SaaS pricing models
Flat rate
One price for one plan. Easy to understand and sell. It fits when most customers get similar value.
Per seat or per user
Customers pay for each person who uses the product. It fits when value grows with the number of users, such as team tools.
Per account
One price per company, whatever its size. Simple, but large customers may pay the same as small ones.
Usage based
Customers pay for what they use, such as API calls or storage. It fits when usage tracks value, but revenue is harder to predict.
Tiered
Several plans with different features or limits. It lets customers choose and gives them room to upgrade.
Hybrid
A base fee plus charges for seats or usage. It combines predictable revenue with growth as customers use more.
Gross margin vs contribution margin
Gross margin shows how much is left after the costs of delivering your product. That includes hosting, third party services and support. It tells you how efficient your product is to run.
Contribution margin shows how much each customer adds after the costs that grow with that customer, including payment fees. It tells you how much each customer contributes to your shared costs and profit.
Both matter. Gross margin is what investors usually compare. Contribution margin is what you use to work out break even and CAC payback. Exactly which costs go where depends on your accounting policy, so be consistent.
Monthly vs annual SaaS pricing
Many SaaS companies offer a discount for paying a year upfront. For example, a $100 monthly plan with a 20% annual discount costs $960 a year. That is $80 a month.
- Cash. You collect a full year of payment at once. That helps fund growth.
- Revenue. Each customer brings in less per month. Your accountant will usually spread the payment across the year as revenue.
- Retention. Annual customers cannot leave until renewal. That only helps if they also renew.
How much should a SaaS business charge?
There is no single right price. It depends on several things.
- Your costs, which set the floor
- The value you create, which sets the ceiling
- What customers would use instead, including doing nothing
- How different your product is
- Who you sell to and how they buy
How to choose SaaS pricing tiers
Good tiers follow real differences between customer groups. Start with the customers, not the features.
- Find your segments. For example, solo users, growing teams and large companies.
- Match what each needs. Put the features and limits each group values in its tier.
- Make the next step clear. Customers should see why upgrading is worth it.
- Keep it simple. Too many tiers make choosing harder.
Common SaaS pricing mistakes
- Copying competitors. Their costs, customers and goals are different from yours.
- Ignoring variable costs. AI, API and support costs can grow fast with each customer.
- Confusing revenue with profit. High MRR can still lose money.
- Guessing the annual discount. A big discount can cost more than the cash it brings in.
- Forgetting payment fees. They come out of every payment.
- Charging per seat when value doesn’t grow with seats. Customers will share logins or leave.
- Vague usage units. If customers can’t predict their bill, they hesitate to buy.
- Assuming customers will stay at a higher price. Prices affect sign ups and churn.
- Treating a calculation as a market price. Test before you commit.
Limits of a SaaS pricing calculator
The results are only as good as your inputs. The calculator does the maths. It cannot judge the market for you.
- It cannot tell you how much customers are willing to pay.
- It cannot predict how sign ups or churn will change with price.
- It does not know how your product compares with alternatives.
- It treats your customer counts as given, not as forecasts.
- It does not model taxes, refunds, currency conversion or accounting rules.
Frequently asked questions
How do I calculate the price of a SaaS product?
Start with the cost of serving one customer, including payment fees. Divide it by one minus your fee percentage and target margin. That gives a target margin price. Then compare it with customer value, willingness to pay and alternatives.
What is a good gross margin for a SaaS business?
It varies by product and stage. As one reference point, the 2022 KeyBanc Capital Markets survey of private SaaS companies reported a median subscription gross margin of 77%. Products with heavy AI, data or service costs often run lower. Use your own target.
Should I use per seat or usage based pricing?
Use per seat when value grows with the number of people using the product. Use usage based pricing when value grows with how much customers use it. Many products combine a base fee with one of these.
How do I calculate a SaaS annual subscription price?
Multiply the monthly price by 12, then subtract the discount. For example, 0 × 12 with a 20% discount is 0 a year, or a month.
How does an annual discount affect revenue?
It lowers revenue per customer. A 20% discount means each annual customer brings in 20% less. In return, you collect cash upfront and keep the customer for at least a year.
How many customers do I need to break even?
Divide your shared monthly costs by the contribution each customer makes. For example, ,000 of costs and contribution per customer means 125 customers. If contribution is zero or negative, more customers will not help.
Should I include hosting and API costs in my pricing?
Yes. Costs that grow with each customer belong in cost per customer. Shared hosting belongs in delivery costs. Enter each cost only once.
How do payment processing fees affect subscription prices?
They take a share of every payment. To keep the same margin, the price must rise by more than the fee itself. With a cost, a 3% plus
How do I calculate the price of a SaaS product?
Start with the cost of serving one customer, including payment fees. Divide it by one minus your fee percentage and target margin. That gives a target margin price. Then compare it with customer value, willingness to pay and alternatives.
What is a good gross margin for a SaaS business?
It varies by product and stage. As one reference point, the 2022 KeyBanc Capital Markets survey of private SaaS companies reported a median subscription gross margin of 77%. Products with heavy AI, data or service costs often run lower. Use your own target.
Should I use per seat or usage based pricing?
Use per seat when value grows with the number of people using the product. Use usage based pricing when value grows with how much customers use it. Many products combine a base fee with one of these.
How do I calculate a SaaS annual subscription price?
Multiply the monthly price by 12, then subtract the discount. For example, $100 × 12 with a 20% discount is $960 a year, or $80 a month.
How does an annual discount affect revenue?
It lowers revenue per customer. A 20% discount means each annual customer brings in 20% less. In return, you collect cash upfront and keep the customer for at least a year.
How many customers do I need to break even?
Divide your shared monthly costs by the contribution each customer makes. For example, $10,000 of costs and $80 contribution per customer means 125 customers. If contribution is zero or negative, more customers will not help.
Should I include hosting and API costs in my pricing?
Yes. Costs that grow with each customer belong in cost per customer. Shared hosting belongs in delivery costs. Enter each cost only once.
How do payment processing fees affect subscription prices?
They take a share of every payment. To keep the same margin, the price must rise by more than the fee itself. With a $20 cost, a 3% plus $0.30 fee and an 80% target margin, the price rises from $100 to about $119.41.
How do I estimate a value based price?
Estimate the money your product saves or earns for a typical customer each month. Choose a share of that value to charge, then test it with real customers.
Can this calculator determine the best price for my SaaS product?
No. It shows what different prices mean for your costs, margins and revenue. The best price depends on customers and the market, so test before you decide.
How do I estimate a value based price?
Estimate the money your product saves or earns for a typical customer each month. Choose a share of that value to charge, then test it with real customers.
Can this calculator determine the best price for my SaaS product?
No. It shows what different prices mean for your costs, margins and revenue. The best price depends on customers and the market, so test before you decide.
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