The CAC payback formula
The standard formula divides acquisition cost by the gross profit one customer brings in each month.
Example: a €6,000 CAC, €500 a month in revenue and an 80% gross margin give €400 of gross profit a month, so the customer pays back in 15 months.
The calculator above goes one step further. It follows a cohort of customers month by month, removes the share that churns and adds the expansion from those who stay, then counts the months until the cohort's cumulative gross profit equals CAC. With no churn and no expansion, both methods give the same answer.
Use gross margin, not revenue. A revenue-based payback at 80% gross margin comes out 20% shorter than the real one, and that is the version that usually ends up in board decks.
What is a good CAC payback period?
The median B2B SaaS company paid back CAC in 16 months in 2025, down from 18 months in 2024, according to the 2026 SaaS and AI Performance Benchmarks from Benchmarkit and Aleph (198 companies reporting payback). Smaller contracts pay back faster, and so do faster-growing companies.
| Segment | CAC payback | Source |
|---|---|---|
| All B2B SaaS, median | 16 months (2024: 18) | Benchmarkit x Aleph, Jun 2026 |
| Contract value under $5K a year | 11 months | Benchmarkit x Aleph, Jun 2026 |
| Contract value $50K to $100K a year | 22 months | Benchmarkit x Aleph, Jun 2026 |
| Growing more than 50% a year | 10 months | Benchmarkit x Aleph, Jun 2026 |
| Horizontal vs vertical SaaS | 14 vs 18 months | Benchmarkit x Aleph, Jun 2026 |
| Target for SMB-focused companies | Under 12 months | Bessemer, Sep 2021 |
| Target for mid-market | Under 18 months | Bessemer, Sep 2021 |
| Target for enterprise | Under 24 months | Bessemer, Sep 2021 |
The calculator's verdict uses these bands: under 12 months is strong, 12 to 18 is healthy, 18 to 24 is stretched and over 24 is slow. Read it against your segment: 20 months is a problem for a $100-a-month product and normal for a $60,000 contract.
Benchmarks count gross-margin payback without churn. If you compare your churn-adjusted number with them, expect yours to look a few months worse; compare the "simple formula" line instead.
Why does churn change the answer?
Payback is earned one month at a time, and every month part of the cohort leaves. A customer who churns in month 9 never repays a 15-month CAC. The simple formula assumes every customer stays until payback, so it always shows the shortest possible number.
| Monthly churn | Simple payback | Payback with churn |
|---|---|---|
| 0% | 15 months | 15 months |
| 1% | 15 months | 16.2 months |
| 2% | 15 months | 17.7 months |
| 3% | 15 months | 19.6 months |
| 5% | 15 months | 27.0 months |
| 7% | 15 months | Never |
Computed with this calculator: €6,000 CAC, €500 a month, 80% gross margin, no expansion.
Expansion works the other way. Customers who add seats or upgrade repay CAC faster, and with net revenue retention above 100% a cohort keeps paying back even while some customers leave.
How do you shorten CAC payback?
Five levers move the number, and the calculator ranks them for your inputs.
- Price. A price rise reaches every new customer at no extra acquisition cost. It is usually the fastest lever for companies with low churn.
- Acquisition cost. Move budget toward channels with shorter payback, and cut the ones that do not pay back within your target. Measure CAC by channel, not only blended.
- Gross margin. Support load, hosting and payment fees all sit between revenue and payback.
- Churn. Early churn hurts payback most, because those customers leave before they have repaid anything. Onboarding is a payback lever.
- Expansion. Seat growth and add-ons raise the monthly gross profit of the customers who stay.
Blended payback can hide a slow channel. A paid channel at 30 months and an organic channel at 4 months can average to a healthy-looking 12. For how organic search compares with paid on cost and payback, see the SEO vs PPC statistics and SEO ROI statistics.
FAQ
How do you calculate CAC payback?
Divide customer acquisition cost by the monthly gross profit one new customer brings in: CAC payback in months = CAC / (monthly revenue per customer x gross margin). This calculator also counts monthly churn and expansion, because a customer who leaves stops paying back.
What is a good CAC payback period?
Under 12 months is strong for most B2B SaaS companies, 12 to 18 months is healthy, 18 to 24 months is stretched and anything over 24 months needs very low churn to work. Enterprise companies with large contracts usually run longer paybacks than SMB companies.
Should CAC payback use revenue or gross margin?
Gross margin. Revenue still has to pay for hosting, support and payment fees before it pays back acquisition, so a revenue-based payback flatters the result by the size of those costs. At 80% gross margin, a revenue-based figure is 20% too short.
Why does churn change CAC payback?
Payback is earned one month at a time, and every month some customers in the cohort leave. With 3% monthly churn, a cohort that would pay back in 20 months on the simple formula takes about 30 months, and at high enough churn it never pays back at all.
What CAC should I use?
Fully loaded sales and marketing cost for a period (salaries, tools, agencies and media) divided by the new customers won in that period. Use the same period for spend and customers, and lag customers by your sales cycle if it is longer than a month.