CAC Payback Period: $500 CAC, $25 ARPU, 60% Margin
Calculate the payback period for a business with a $500 CAC, $25 monthly ARPU, and 60% gross margins.
How to use this tool
- Enter customer acquisition cost (cac), monthly revenue per customer (arpu) and gross margin in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your payback period and the full breakdown beneath it.
When gross margins are moderate and ARPU is low, even a modest CAC can result in a long payback period — this scenario helps benchmark whether unit economics are viable.
Frequently asked questions
- What is a good CAC payback period?
- Best-in-class SaaS companies target 12 months or less. 12–18 months is acceptable for enterprise sales. Above 24 months is a warning sign — it takes too long to recover acquisition costs, which strains cash flow.
- Why include gross margin in the payback calculation?
- Because not all revenue is profit. If your ARPU is $100 but you spend $60 on hosting and support (40% margin), you only recover $40/month toward CAC. Including gross margin gives a more accurate cash-recovery picture.