SaaS Pricing & Margin Calculator

Inputs

Rule of thumb: healthy SaaS gross margin is typically 70-85%. Below ~60% usually means either your cost to serve is too high (infra, support, payment fees) or your price is too low relative to what it costs to deliver the product.

Price to hit target margin

Given your cost to serve above, the price required to hit the target margin you entered.

Margin, markup, and break-even aren't the same thing

Gross margin is profit as a percentage of price ((price − cost) ÷ price). Markup is profit as a percentage of cost ((price − cost) ÷ cost). These are easy to conflate but produce very different numbers — a 100% markup over cost is only a 50% margin, not 100%. Break-even customer count is separate again: it's how many customers, at your current gross profit per customer, it takes to cover your fixed costs (salaries, tools, infrastructure) before you're actually profitable.

How to use it

• Typical healthy SaaS gross margin is 70-85%. Below ~60% usually means cost to serve is too high or price is too low for the delivery cost.
• Break-even customer count is most useful as a sanity check: if it implies more customers than exist in your addressable market, the price or cost structure needs to change before the business model works at all.
• Use "price to hit target margin" when cost to serve is fixed (e.g. infra cost per seat) and you're solving for what to charge, rather than what margin a given price produces.

Common mistakes

• Quoting markup when margin was meant, or vice versa — always state which one a number refers to, since the gap between them grows fast at high multiples.
• Leaving payment processing fees, customer support time, and infrastructure costs out of "cost to serve," which understates true cost and overstates margin.
• Ignoring fixed costs entirely and looking only at per-customer margin — a healthy per-customer margin can still mean the business loses money overall if fixed costs are high relative to customer count.