Free burn rate calculator 2026. Calculate gross burn = total monthly cash outflow, net burn = outflow - inflow. See runway in months. Critical startup metric — track alongside cash balance and fundraising timeline.
Enter your Monthly Cash Outflow (Gross Burn) — total cash leaving the bank each month for payroll, cloud, rent, and marketing.
Enter your Monthly Cash Inflow — actual cash collections received from customers during the month.
Enter your Current Cash Balance (total unrestricted cash in checking, treasury, and money market accounts).
Review your Monthly Net Burn, Annualized Burn, Daily Burn, and Cash Runway in months.
Burn rate measures how fast a company consumes its cash reserves before reaching positive cash flow. Gross Burn is your total monthly operating cash expense, while Net Burn subtracts monthly cash revenue collected. Dividing your current cash balance by Monthly Net Burn reveals your exact Cash Runway in months.
$100,000 monthly cash outflow, $30,000 monthly cash inflow, and $1,260,000 in the bank. Gross Burn = $100,000/mo. Net Burn = $70,000/mo ($840,000/yr). Cash Runway = $1,260,000 ÷ $70,000 = 18.0 months (Healthy).
$45,000 monthly outflow (founders + GPU compute), $0 inflow, $540,000 cash balance. Gross Burn = Net Burn = $45,000/mo ($1,500/day). Cash Runway = 12.0 months.
$250,000 monthly cash outflow, $285,000 monthly cash collections. Net Burn = -$35,000/mo (generating +$35,000/mo net free cash flow). Runway is Infinite ("Default Alive").
| Funding Stage | Typical Monthly Net Burn | Target Runway at Financing | Fundraising Trigger Zone | Target Burn Multiple |
|---|---|---|---|---|
| Pre-Seed / Bootstrapped | $10,000 – $35,000/mo | 18 – 24 months | < 6 months remaining | N/A (Product-Market Fit) |
| Seed Stage | $40,000 – $120,000/mo | 18 – 24 months | < 9 months remaining | < 2.0x (Good), < 1.5x (Great) |
| Series A | $150,000 – $400,000/mo | 18 – 24 months | < 9 – 12 months remaining | 1.0x – 1.5x Net Burn / Net New ARR |
| Series B | $400,000 – $1,000,000/mo | 24 – 30 months | < 12 months remaining | < 1.0x – 1.2x (Efficient Growth) |
| Growth / Late Stage (Series C+) | $800,000 – $2,500,000/mo | 24+ months (or Default Alive) | < 12 months remaining | < 0.8x (Approaching Breakeven) |
| Burn Multiple (Net Burn ÷ Net New ARR) | Capital Efficiency Rating | Investor Interpretation |
|---|---|---|
| Under 1.0x | Elite / Best-in-Class | Generating more than $1.00 of new ARR for every $1.00 of cash burned |
| 1.0x to 1.5x | Good / Venture Scale | Healthy capital efficiency; strong product-market fit and GTM execution |
| 1.5x to 2.0x | Suspect / Moderate | Acceptable for early seed/Series A ramp, but requires margin improvement |
| Over 2.0x | Bad / High Cash Burn | Burning >$2 for every $1 of new ARR; high dilution risk if not corrected |
Founders often confuse accrual accounting losses (EBITDA or Net Income on the P&L) with Cash Burn Rate. Burn rate must always be calculated on a **strict cash basis** using your bank balances. If a customer signs a $120,000 annual contract in January with Net-60 payment terms, your accrual MRR increases immediately, but your January cash inflow is $0 until the wire hits your bank account in March.
Similarly, non-cash accounting expenses like depreciation, amortization, and stock-based compensation are excluded from burn rate, while upfront annual software prepayments, capital expenditures (laptops, equipment), and debt principal payments must be included in Monthly Cash Outflow.
Find answers to the most common questions about burn rate calculator.
Gross burn is the total amount of cash your business spends every month on operating expenses (payroll, rent, AWS, marketing) before considering revenue. Net burn is Gross Burn minus monthly cash revenue collected. If you spend $100,000/month and collect $40,000/month from customers, your Gross Burn is $100,000 and your Net Burn is $60,000.
In the 2026 venture environment, startups should target 18 to 24 months of cash runway immediately following a funding round. You should initiate your next fundraising process—or execute a cost-reduction plan to reach breakeven—when you have 9 to 12 months of runway remaining. Dropping below 6 months of runway puts the company in a distressed zone.
Take your starting cash balance on the first day of a quarter, subtract your ending cash balance on the last day of the quarter (excluding any new equity/debt financing proceeds), and divide by 3. For example, if your bank balance dropped from $1,500,000 on Jan 1 to $1,230,000 on March 31, your average monthly net burn is ($1,500,000 - $1,230,000) ÷ 3 = $90,000/month.
The Burn Multiple equals Annualized Net Burn divided by Net New ARR added over the same period. A Burn Multiple below 1.0x is elite, 1.0x to 1.5x is good, 1.5x to 2.0x is mediocre, and above 2.0x indicates inefficient cash consumption.
Before cutting headcount (which typically represents 60–75% of SaaS burn), companies can extend runway by: (1) incentivizing customers to switch from monthly to upfront annual billing (offering a 10–15% discount for immediate cash), (2) consolidating redundant SaaS licenses and renegotiating cloud commitments, (3) freezing non-revenue-generating backfills, and (4) cutting high-CAC paid ad channels.
Calculations and computational models on QuickBizCalc are verified against published regulatory standards and statutory tax tables:
Publication 15-T (Federal Income Tax Withholding Methods) & Publication 15 (Employer's Tax Guide).
Fair Labor Standards Act (FLSA 29 U.S.C. § 207) regulations on overtime hours, recordkeeping, and minimum wage.
OASDI taxable maximum wage base limits and statutory FICA tax rates (6.2% Social Security + 1.45% Medicare).
Formulas and worked examples are checked against the sources above before publishing. For advice on your own situation, consult a licensed tax professional or accountant.
Monthly Net Burn Rate
$70,000.00/mo
Gross Burn
$100,000.00/mo
Net Burn
$70,000.00/mo
Cash Runway
18.0 mos
Annual Net Burn
$840,000.00/yr
