SaaS annual discount calculator: what "save 17%" really means

Pricing pages say "save 17%", "2 months free" or "billed annually" without always showing the maths. Enter a monthly price and either the yearly price or the discount, and see the effective monthly price, the real percentage off, how many months are free, and what a customer commits to up front. Use it to read a competitor's page, or to choose the yearly discount for your own plan. It runs in your browser and sends nothing anywhere.

The arithmetic

• Yearly total = what the customer pays once for 12 months. Month to month, the same year would cost monthly price times 12.
• Effective monthly price = yearly total divided by 12. This is the number most pages show next to a "billed annually" label.
• Real discount = 1 minus (yearly total divided by monthly price times 12).
• Months free = monthly price times 12 minus the yearly total, divided by the monthly price.

Worked example: a plan at $12 a month is $144 over a year. A yearly price of $120 is $10 a month, a 16.7% discount (usually rounded to "save 17%") and exactly 2 months free. That is why "2 months free" and "save 17%" so often appear together: ten months of payment for twelve is 83.3% of the price.

Reading a competitor's page with it

1. Find both prices. If the page shows only one number and a "save X%" badge, choose "discount percentage" and enter the monthly price you can see. If the badge refers to a number you cannot confirm, treat the result as an inference and write down that you inferred it.
2. Check the page's own claim against the maths. A badge that says 20% while the two prices give 16.7% means one of the prices or the badge is stale, or the discount applies to a different plan. Record the mismatch as a question, not as a fact.
3. Note the commitment. The customer pays the full yearly total at once, which is a larger up-front charge and usually non-refundable after a window. A 17% discount is only a saving if the customer would have stayed all twelve months.

Choosing a yearly discount for your own plan

Common yearly discounts on public pricing pages cluster around 15 to 20 percent, often expressed as two months free. There is no right number: a deeper discount pulls cash forward and reduces churn, but gives away margin to customers who would have paid yearly anyway. Use the calculator to see what each option means in plain words before you put it on a page, then watch what customers actually pick.

Prices on competitors' pages change without notice. Write down the URL and the date you read each figure, and keep a list of what you could not establish. The 9-step checklist for reading a pricing page covers the rest, and the free comparison template puts several plans on one basis for your team size.

Would rather not do the research yourself? The Price Teardown service reads your competitors' live pricing pages and delivers a sourced, dated report in 24 hours for $49.