Gross vs Net Burn Rate Calculator
Calculate gross monthly burn rate and net monthly cash drain. Determine cash flow sustainability and burn ratios. Free interactive SaaS tool.
Calculated Results
Net Monthly Burn
$13,000
Gross Monthly Burn
$35,000
Revenue Coverage Ratio
63%
About this tool
Understanding the mathematical distinction between gross burn and net burn is essential for responsible financial stewardship in software startups. Gross burn represents the total cash outflow your company expends each month—payroll, hosting infrastructure, marketing software, legal retainers, and office overhead—regardless of how much revenue you bring in. Net burn represents your actual monthly cash deficit: total gross expenses minus total cash collected from paying customers. If your gross burn is $30,000 and your customer subscriptions generate $20,000 in cash, your net burn is $10,000. Tracking net burn ensures your team knows the true rate at which bank balances decline. Use this calculator to compute your gross and net burn metrics.
How It Works
- 1Input your total monthly operating expenses (Gross Burn).
- 2Input your total monthly collected cash revenue.
- 3Review your calculated Net Burn, your burn rate coverage ratio, and cash-flow-positive status.
Formula & Math
Transparent LogicNet Burn = Monthly Gross Expenses - Monthly Collected Revenue
Worked Practical Example
A SaaS expends $40,000/mo on salaries and servers, and collects $28,000/mo in subscription revenue.
Calculation / Steps
Gross Burn = $40,000. Net Burn = $40,000 - $28,000 = $12,000/mo.
Expected Result
Net Burn of $12,000/month (revenue covers 70% of operating expenses).
Frequently Asked Questions
Why do investors care about gross burn if net burn is low?+
Gross burn indicates your absolute operational risk. If a major client cancels or sales stall, net burn instantly spikes toward your gross burn figure.
What is an acceptable net burn for an early-stage startup?+
Net burn should align with your runway targets. In early seed stages, keeping net burn under $10,000 to $20,000/mo preserves valuable iteration time.
How does annual billing reduce net burn?+
Collecting twelve months of subscription fees upfront injects immediate cash that directly offsets monthly expenses, lowering net burn for that quarter.
Automate retention on your cancel button
BoolBul directly lowers your net burn by keeping paying subscribers active and depositing predictable recurring cash into your accounts.
Related SaaS Tools
SaaS Runway Calculator
Calculate your SaaS cash runway in months and estimate your zero cash date. Model monthly net burn and growth scenarios. Free interactive tool.
Break-Even MRR Calculator
Calculate the exact Monthly Recurring Revenue (MRR) required to achieve operational break-even after accounting for gross margin deductions.
Burn Multiple Calculator
Calculate your SaaS Burn Multiple: Net Burn divided by Net New ARR. Evaluate how efficiently your startup turns burned capital into recurring revenue.
Headcount Cost Planner
Calculate fully loaded headcount costs including payroll taxes, benefits, and equipment. Plan hiring budgets and monthly burn impact. Free tool.