# "Two Months Free" — What Discount Is That Really?

URL: https://www.paydude.io/resources/tools/two-months-free-calculator
Type: Free interactive calculator
Summary: Two months free is a 16.67% discount, not 20%. Convert any months-free annual offer into its real percentage and effective monthly price.

"Two months free" is the most common annual offer in SaaS and one of the most commonly miscalculated. It is not 20% off.

## Summary

Two months free is a 16.67% discount — two twelfths, not two tenths. You charge for ten months and deliver twelve. One month free is 8.33%; three months free is 25%. The mistake is dividing by the months charged instead of the months in a year.

## The arithmetic

At $49 a month, a year at full price is $588. Two months free means you charge for ten months: $490.

```text
Full year:      $49 x 12 = $588
Two months free: $49 x 10 = $490
Saved:                     $98

Discount = 98 / 588 = 16.67%
```

The common error is computing 2 ÷ 10 = 20%, using the months charged as the denominator. The discount is measured against what the customer **would have paid**, which is twelve months.

**Months free converted to percentage**

| Offer | Months charged | Real discount |
| --- | --- | --- |
| 1 month free | 11 | 8.33% |
| 2 months free | 10 | 16.67% |
| 3 months free | 9 | 25.00% |
| 4 months free | 8 | 33.33% |

> **Which way round should you advertise it?:** "Two months free" consistently outperforms "16.67% off" — it is concrete, and it sounds larger than the percentage does. Use the phrase in marketing and the percentage in your financial model.

## Why the distinction matters

- **Forecasting.** Modelling 20% when the real figure is 16.67% understates annual revenue by about 3.3 points.
- **Comparison.** A competitor offering a flat 20% is more generous than two months free, not less.
- **Margin.** The discount comes straight out of gross profit, so the difference compounds across every annual customer.

**See what Paydude charges** Published tiers, no negotiation, and every situational fee listed. — [View pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### Is two months free the same as 20% off?

No. It is 16.67%. You charge for ten months out of twelve, and the discount is measured against the twelve months the customer would otherwise have paid: 2 ÷ 12 = 16.67%. Dividing by the ten months charged gives 20% and is the usual mistake.

### What discount is three months free?

25%. Three twelfths of the annual price. Four months free is 33.33%, which is unusually deep for SaaS and typically only appears in launch offers.

### Should I say 'two months free' or '16.67% off'?

Two months free, in customer-facing copy. It is easier to picture and reads as more generous than the equivalent percentage. Use the percentage internally so your revenue model is accurate.

### Do I have to give exactly two months?

No. Any discount works; two months free is simply a convention because it is easy to say. If you want a round 20%, that is 2.4 months free — better advertised as a percentage.