# ARR to MRR Calculator

URL: https://www.paydude.io/resources/tools/arr-to-mrr-calculator
Type: Free interactive calculator
Summary: Convert ARR to MRR and back, with quarterly, weekly and daily equivalents. Plus the $1M ARR versus $100K MRR confusion, settled.

ARR is MRR times twelve. The arithmetic is trivial; what is worth stating is that ARR is a run rate, not a record of what you collected over the past year.

## Summary

ARR = MRR × 12. MRR = ARR ÷ 12. $1M ARR is $83,333 MRR — less than $100K MRR, not more. ARR is a run rate, not last year's revenue. Only recurring revenue belongs in either figure.

## Common conversions

**ARR and MRR side by side**

| ARR | MRR |
| --- | --- |
| $120,000 | $10,000 |
| $500,000 | $41,667 |
| $1,000,000 | $83,333 |
| $1,200,000 | $100,000 |
| $10,000,000 | $833,333 |

> **$1M ARR is smaller than $100K MRR:** $1M ARR is $83,333 a month. $100K MRR is $1.2M ARR — a 20% larger business. Founders regularly treat $1M ARR as the bigger milestone, and it is the smaller one.

## ARR is a run rate

A company reaching $1M ARR in December has not collected $1M that year. It is running at a rate which, if sustained for twelve months, would produce $1M. A business that grew from $200K to $1M ARR over the year probably collected somewhere near $500K.

That distinction matters when comparing ARR against costs, which are actual rather than annualised.

## What counts as recurring

- **Include** subscriptions, retainers and committed contracts.
- **Include** annual contracts, divided by twelve for MRR.
- **Exclude** one-off setup, implementation and professional services fees.
- **Exclude** usage revenue that is genuinely unpredictable, or report it separately.

Counting one-off revenue in ARR inflates the figure and misleads anyone comparing it against a valuation multiple — see the [valuation estimator](https://www.paydude.io/resources/tools/saas-valuation-calculator).

**Fewer fees on every recurring dollar** Published tiers that improve automatically with volume. — [See pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### How do I convert ARR to MRR?

Divide by twelve. $1,000,000 ARR is $83,333 MRR. To go the other way, multiply MRR by twelve.

### Is $1M ARR the same as $100K MRR?

No, and the difference catches people out. $1M ARR is $83,333 MRR. $100K MRR is $1.2M ARR — a 20% larger business. The two milestones are often ranked the wrong way round.

### Does ARR mean I earned that much last year?

No. ARR is a run rate: what you would collect over twelve months at your current rate. A company that grew to $1M ARR during the year collected considerably less than $1M in that year.

### Should setup fees count toward ARR?

No. ARR should include only recurring revenue. One-off implementation and professional services fees are real revenue but not recurring, and including them inflates both the figure and any valuation multiple applied to it.