Finance calculator
CAC Payback Period Calculator
This calculator estimates your CAC payback period: how many months of gross profit it takes to earn back what you spent to acquire a customer. It uses gross-margin-adjusted revenue, the honest way to measure payback, and assumes steady monthly revenue per customer.
How to use this calculator
- Enter your customer acquisition cost (CAC) — sales and marketing spend per new customer.
- Add the average monthly revenue per account and your gross margin.
- Read the payback period in months and the monthly gross profit per customer.
Formula
- Monthly gross profit per customer = monthly revenue x gross margin
- CAC payback (months) = CAC / monthly gross profit per customer
Example calculation
A $1,200 CAC with $100 monthly revenue at an 80% gross margin gives $80 of monthly gross profit and a CAC payback of 15 months.
How to interpret the results
- Many SaaS teams target a CAC payback under 12 months; under 18 is common for higher-priced B2B.
- Always use gross-margin-adjusted revenue, not raw revenue — it's the cash that actually pays back CAC.
- Pair payback with the LTV:CAC ratio; a short payback with a weak ratio (or vice versa) still signals a problem.
Frequently asked questions
What is a good CAC payback period?
Under 12 months is a common target for SaaS; many healthy B2B businesses run 12-18 months. The faster you recover CAC, the less cash growth ties up.
Why use gross margin in CAC payback?
Because only the gross-profit portion of revenue is available to repay acquisition cost — the rest covers the cost of serving the customer. Using raw revenue understates the true payback.
How does payback relate to LTV:CAC?
They're complementary. Payback measures how fast you recover CAC; LTV:CAC measures total return over the customer's life. Track both — a short payback can still hide a low lifetime value.
Planning disclaimer
MoneyHackWise calculators are for general informational and planning purposes only and do not provide financial, investment, tax, legal, accounting, lending, or business advice. Results are estimates based on the inputs and assumptions shown.