# What Should I Charge for My SaaS?

URL: https://www.paydude.io/resources/tools/what-should-i-charge-for-my-saas
Type: Free interactive calculator
Summary: Want $1M ARR from 500 customers? That is $166.67 a month. Work backwards from your revenue goal to the price it actually requires.

Most founders pick a price that feels right and then discover what it implies. Doing it the other way round — fixing the goal and the reachable audience, then solving for price — usually reveals the first number was far too low.

## Summary

Price is a function of your revenue goal and how many customers you can realistically reach. $1M ARR from 500 customers requires $166.67 a month, not $29. The answer is a floor: it assumes zero churn, which no business has. If the required price seems impossible, the audience assumption is usually the thing that is wrong.

## Why work backwards

Pricing forwards — "$29 feels about right" — hides the arithmetic. It only becomes visible much later, when $29 turns out to require 2,874 customers and the total addressable audience is a few thousand people.

Working backwards makes the constraint explicit up front, where it is still cheap to change.

**Price required for $1M ARR at different audience sizes**

| Customers you can reach | Required price | Realistic? |
| --- | --- | --- |
| 100 | $833/mo | Enterprise or high-value vertical |
| 500 | $167/mo | Mid-market B2B |
| 2,000 | $42/mo | SMB tooling |
| 8,334 | $10/mo | Consumer or prosumer scale |

None of these are wrong. They are simply four different companies, with different sales motions, support costs and marketing channels. The price decides which one you are building.

## Treat the answer as a floor

The calculation assumes every customer stays forever. In reality some churn every month, so the price you actually need is higher than the number here.

> **Adjust for churn:** At 3% monthly churn you replace roughly a third of your customers each year just to stand still. Either price above the floor or plan to acquire well beyond the customer count you entered.

## If the required price looks impossible

1. **Question the audience number first.** It is usually optimistic, and it is the input the price is most sensitive to.
2. **Look at who you are selling to.** The same product sold to a business that saves $2,000 a month is worth a multiple of what it is worth to an individual.
3. **Consider tiers.** A blended average is easier to hit than one price — see the [tier mix calculator](https://www.paydude.io/resources/tools/saas-tier-mix-calculator).
4. **Reconsider the goal.** $1M ARR is a milestone, not a requirement. $250K from 200 customers at $104 is a real business.

**Keep more of what you charge** Card fees come straight out of the price you just calculated. — [See Paydude pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### Should I price per seat or per account?

Per seat ties revenue to how much the customer grows, which is why most B2B SaaS uses it. Per account is simpler to sell and easier to forecast. If you use per seat, enter your average revenue per account here, not your per-seat price.

### Is the calculated price a target or a minimum?

A minimum. It assumes nobody ever churns, which no business achieves. With typical churn you need either a higher price or materially more customers than the figure you entered.

### What if my price ends up much higher than competitors?

That is informative rather than fatal. It usually means you are aiming at a smaller audience than they are, which points toward a narrower, higher-value product rather than a cheaper one. Competing on price against a better-funded incumbent is rarely the winning move.

### How do payment fees affect this?

They come off the top. At 2.9% + 30¢, a $29 plan nets about $27.86 — roughly 4% of your revenue, before you have paid for anything else. On low-priced plans that is a meaningful slice of the price you just calculated.