Free MRR calculator (and how MRR works).

What MRR actually is

MRR is the total predictable, recurring revenue your subscription business earns in a month, normalized so every plan is expressed as a monthly figure. It deliberately excludes anything that does not recur: one-time purchases, setup fees, and usage spikes.

It matters because recurring revenue is the part of your business you can plan around. A month with a big one-off sale looks great and tells you little; MRR strips that away to show the floor you can count on next month, and the month after. For a founder deciding where to spend time, the trend in MRR is often the clearest signal of whether a product is actually building or just having a good week.

The basic MRR formula

At its simplest, MRR is the number of paying subscribers multiplied by the average revenue per user per month: active subscribers × average monthly revenue per subscriber.

If you have 100 subscribers each paying $20 a month, your MRR is $2,000. When you have several plans, calculate each plan separately and add them up — which is exactly what the calculator above does: one row per plan, each contributing its own slice.

Normalize annual and other billing periods

The most common error is counting an annual payment as if it all landed in one month. It did land in one month for cash-flow purposes, but for MRR you spread it across the term. An annual plan at $240 contributes $20 of MRR ($240 ÷ 12), not $240 in the renewal month and zero for the rest of the year.

The same logic applies to any non-monthly period: divide a quarterly price by three, a six-month price by six. The goal is a steady monthly figure that reflects the ongoing commitment, not the lumpy timing of when the card is charged. The calculator handles this for annual plans automatically.

What to exclude: one-off sales, taxes, and fees

Three things routinely sneak into MRR and should not be there. One-time purchases — a template, a lifetime deal, a setup fee — are not recurring, so they belong in net revenue, not MRR. Taxes such as VAT or sales tax are money you collect on behalf of a government, not revenue, so exclude them. Processing fees are a cost, not revenue; MRR is usually measured on the amount billed, with fees accounted for separately.

The principle is simple: MRR should only ever contain money that will, absent churn, show up again next month. If it would not recur, it is not MRR.

The five movements that change MRR

Once you can calculate MRR at a point in time, the more useful view is how it changes month to month. Five movements explain every change. New MRR comes from brand-new customers. Expansion MRR comes from existing customers upgrading or adding seats. Reactivation MRR comes from previously churned customers returning. Contraction MRR is the revenue lost when customers downgrade. Churned MRR is revenue lost when customers cancel entirely.

Net new MRR for the month is new plus expansion plus reactivation, minus contraction and churn. Tracking these separately tells you not just whether MRR moved, but why — whether growth is coming from new logos or from your existing base, and whether churn is quietly eating the gains.

MRR vs ARR

ARR — annual recurring revenue — is simply MRR × 12. If your MRR is $4,000, your ARR is $48,000. ARR is the same number viewed on an annual scale, favored when talking about larger businesses or annual contracts. For most indie and early-stage founders, MRR is the more natural unit because it matches how quickly things change at small scale. The calculator shows both.

Common mistakes that inflate MRR

A few habits make MRR look bigger than it is. Counting one-off sales as recurring is the biggest: a good launch month gets baked into a run rate that will not hold. Booking the full annual payment as one month's MRR overstates that month and understates the rest. Using gross instead of net — ignoring refunds and failed payments — flatters the number. And blending currencies at a floating rate makes MRR drift with exchange rates rather than the business.

Each of these makes MRR less useful precisely when you most need it to be honest: when you are deciding whether a product is worth continuing.

From a formula to a number that stays current

Calculating MRR once is easy. Keeping it accurate every month across several products is the actual work — and where a spreadsheet slowly loses to reality. This is what VerifiedMRR does: it connects each product's payment account read-only, reconciles the recurring revenue from source, normalizes billing periods and currencies, and keeps the number current on its own.

You get MRR and net revenue per product, side by side, with a keep-or-kill call on each — so the number you calculated by hand today keeps calculating itself tomorrow. If you want the deeper method behind tracking it across a portfolio, the multi-product MRR playbook goes further.