You can't control what you don't measure
Every dollar that leaves your bank account tells a story. Salaries. Cloud infrastructure. tools. Office rent. Marketing spend. But do you actually know where the bulk of your cash is going each month? Most founders have a vague sense-salaries are huge, software adds up-but they don't know the exact number or how it breaks down. This calculator forces clarity. When you see your monthly burn, you can control it.
What This Calculator Does
This tool totals your monthly expenses and subtracts your monthly revenue to show your gross burn and net burn. Gross burn is your total spending regardless of revenue. Net burn is the damage after revenue is counted. If you spend $100K and bring in $20K, your gross burn is $100K but your net burn is $80K. The calculator also breaks down burn by category (payroll, tools, marketing, etc.) so you see where the money actually goes.
How to Use This Calculator
Step 1: List all your monthly expenses by category. Salaries (including founder salaries and benefits), office space, cloud hosting (AWS, Heroku, etc.), SaaS tools (Slack, Salesforce, analytics), customer support, marketing spend, insurance, legal, accounting, and anything else you pay for monthly. If something is annual (insurance, licenses), divide by 12.
Step 2: Add them up to get your total monthly expenses. Be thorough. Most founders underestimate expenses by 20-30% because they forget small subscriptions, contractor fees, or overhead allocations.
Step 3: Enter your total monthly revenue. This is cash you received from customers, minus any cost of goods sold (hosting, payment processing fees, commissions). If you earned $50K gross but paid $5K in payment processing and $10K for hosting your product, your net revenue is $35K.
Step 4: The calculator shows your gross burn (total expenses), your net burn (expenses minus revenue), and a breakdown by category. Pay attention to the biggest expense categories. If 70% of your burn is salaries, your biggest lever for controlling burn is headcount. If 20% is marketing, that's your lever.
Step 5: Model different scenarios. What happens if you cut marketing spend by 50%? What if you hire one fewer person? What if revenue grows 20%? Run the calculator with different inputs to see the impact on your burn. This builds intuition for which expenses are killing you.
The Formula Behind the Math
Gross Burn Rate
Gross Burn = Total Monthly Expenses
Example: Salaries ($60K) + Rent ($8K) + Tools ($5K) + Cloud ($3K) + Marketing ($12K) + Other ($2K) = $90K gross burn.
Net Burn Rate
Net Burn = Gross Burn - Monthly Revenue
Example: $90K (expenses) - $20K (revenue) = $70K net burn.
Burn Rate as percentage of revenue (if you want to see sustainability):
Burn : Revenue Ratio = Net Burn / Monthly Revenue
Example: $70K / $20K = 3.5:1, meaning you're burning 3.5 dollars for every 1 dollar earned. This is unsustainable long-term; you need revenue to grow or burn to shrink.
Months until profitability (assuming linear changes):
Months to Breakeven = (Current Net Burn) / (Monthly Revenue Growth Rate)
Example: If you're burning $70K/month and growing revenue by $10K/month, you'll need 7 months to reach breakeven.
Our calculator does all of this instantly-but now you understand exactly what it's computing.
Seed-Stage Founders Checking if Hiring is Sustainable
You're thinking about hiring your first engineer ($120K salary = $10K/month). Your current burn is $30K (you and a designer). You have $200K in the bank. Adding the engineer brings burn to $40K. That's five months of runway left (instead of 6.67 months). This calculator shows you the true cost of hiring: not just the salary, but the impact on your runway. Is this hire worth one month of runway? Only you can answer, but now you have the data.
Growth-Stage Founders Scaling Expenses
You just hired a sales team (four people at $100K each with benefits = $40K/month). Marketing spend is $50K/month. Your gross burn jumped from $80K to $170K. Revenue is still $30K. Your net burn went from $50K to $140K. Holy shit. This calculator shows you the acceleration. You now have 2.1 months of runway instead of 4. If your sales team doesn't contribute revenue in the next two months, you're in trouble.
Profitability-Minded Operators Tracking Path to Breakeven
Your gross burn is $50K/month. Revenue is $40K. Net burn is $10K. You have $200K cash. That's 20 months of runway. But if you can grow revenue by 5% per month and reduce burn by 2% per month, you'll hit breakeven in 8 months, not 20. This calculator is your dashboard for seeing whether your trajectory leads to profitability or bankruptcy.
CFOs Building Financial Models
You need to present a financial forecast to investors. They want to see burn, runway, and the inflection point where you become cash-positive. This calculator gives you the baseline (current burn). From there, you build a model showing how burn changes as you hire, grow revenue, and scale. Every hire, every marketing campaign, every revenue milestone impacts burn. This calculator is your starting point.
Tips and Things to Watch Out For
Don't forget benefits and payroll taxes. A $100K salary costs you about $130K all-in (health insurance, 401k match, employer FICA, taxes, equipment). If you're accounting for just the base salary, you're underestimating burn. Use fully loaded salary costs in your calculation.
Allocate overhead fairly. If you have a CFO or office manager, their salary is a real burn expense. So is your founder salary, even if you're not taking it. Include all roles in your burn calculation. The true cost of the business is what matters, not what you're personally pocketing.
Don't forget annual costs. Insurance, contracts, software licenses often renew annually. If you have a $12K annual insurance bill, that's $1K per month. Forget about it and you'll be shocked by a $12K charge. Break annual costs into monthly and add them to your burn.
Separate cost of goods sold from operating burn. If you're a service business, cost of goods might include contractor fees that scale with revenue. If you're SaaS, it might include payment processing fees. COGS reduces your net revenue, which reduces how much runway your revenue provides. Don't double-count.
Update this monthly. Your burn rate changes as you hire, add tools, or scale marketing. Calculate your actual burn at the end of each month using real numbers, not estimates. Look for trends: is burn increasing faster than expected? Is revenue flatter than forecast? These signals tell you if you need to adjust your plan.
Compare burn to your business model. Burn of $20K/month is reasonable for a bootstrapped lifestyle business but terrible for a venture-backed SaaS company. What matters is whether your burn is sustainable given your funding and whether your revenue is growing fast enough to offset it. There's no universal "good" burn rate.
*This calculator shows your current burn based on the expenses and revenue you input. Actual burn may vary due to timing of payments, seasonal revenue fluctuations, one-time costs, or changes in headcount. Recalculate monthly with actual numbers. For detailed financial forecasting and planning, consult a CFO or financial advisor.*
Frequently Asked Questions
What's the difference between gross burn and net burn?
Gross burn is your total spending, no matter what. Net burn is what you're actually losing each month after revenue is counted. If you spend $100K and earn $40K, gross burn is $100K but net burn is $60K. Focus on net burn-it's the real cost to your runway.
Should I include my own founder salary in burn?
Yes, absolutely. If you're not taking a salary, you're underestimating true burn. Include a realistic market-rate salary for yourself (even if you're deferring it), and include any other founder compensation. The business has to bear your cost; pretending it doesn't makes your metrics meaningless.
How do I account for variable expenses like credit card processing?
Include them as a percentage of revenue. If payment processing is 3% of revenue and you make $50K, add $1.5K to your monthly expenses. If revenue is highly variable, use an average of the past three months.
What if I have a huge one-time expense (conference, equipment, relocation)?
Add it to the month it occurs. This will spike your burn temporarily. Note it as a one-time cost so you (and investors) understand it's not the new run rate. Better to be surprised by temporary spikes than to permanently increase your forecasted burn.
Should I include taxes in my burn rate?
If you're pre-tax and breaking even, you should expect to owe taxes. If you're a C-corp, add 15-20% to your expenses as a rough estimate of eventual tax liability (even though you don't pay it until later). This prevents the surprise of a huge tax bill eating your cash.
How often does burn change?
More often than you'd think. Every hire increases it, every tool you cancel decreases it, every revenue increase reduces net burn. Recalculate monthly. Compare to your forecast. If actuals are different from plan, investigate why and adjust. This is your biggest financial dashboard.
What if my burn is increasing but revenue is growing?
That's fine, and it's actually the growth story every investor loves. If burn is up 20% but revenue is up 40%, your net burn is improving, and you're on a path to profitability. Track both burn and revenue growth to see the net effect.
Related Calculators
Use the runway calculator to see how many months your cash lasts given your burn rate. Check the employee cost calculator to understand exactly what each hire costs you all-in. The break-even calculator shows you the revenue target you need to hit to stop burning cash.