CAC Payback Period Calculator
One number that tells you if growth is profitable or borrowed. Months to recover acquisition cost from contribution margin.
All sales + marketing spend ÷ new customers.
SaaS typical 70–85%. Marketplace 20–40%.
Healthy SMB: 2–5%. Mid-market: 1–2%. Enterprise: <1%.
CAC payback
15.5 mo
$77 contribution / month
LTV : CAC
2.1×
LTV $2,574 · Lifetime 33 mo
Conservative
20.2 mo
Realistic
15.5 mo
Aggressive
11.7 mo
Bands swing on first-month upgrade rate and discount stack — assumed steady-state ARPU above.
CAC is the variable you control directly. A 25% CAC reduction (better targeting, organic, referrals) drops payback by ~25% — fastest path to healthy.
Payback sits in the typical 12–18 month band most growing SaaS companies live with.
- Monthly contribution = ARPU × gross margin %
- CAC payback (months) = CAC ÷ monthly contribution
- Lifetime (months) = 100 ÷ monthly churn %
- LTV = monthly contribution × lifetime
- LTV : CAC ratio = LTV ÷ CAC
Common questions
What's a good CAC payback period?▾
Under 12 months is healthy SMB SaaS. Under 18 months is healthy mid-market. Over 24 months means you're funding growth from someone else's pocket — only acceptable with strong net retention.
Why use gross margin, not revenue?▾
Because the dollar that pays back CAC is the contribution dollar, not the top-line dollar. A 70%-margin SaaS recovers CAC almost twice as fast as a 40%-margin one at the same ARPU.
Should I include sales salaries in CAC?▾
Yes. Fully-loaded CAC = all sales + marketing spend / new customers in that period. Pipeline-only CAC understates the true number by 2–4×.
What's the link to runway?▾
If your payback is longer than your runway, you're betting you can fundraise before each cohort breaks even. Pair this with the SaaS Runway Calculator.