Business Tools

Burn Rate Calculator

Calculate gross and net burn rate, and project your cash runway

Last reviewed: How we build & verify
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How it works

Quantifies how fast a company consumes cash. Gross burn is total monthly outflow; net burn subtracts revenue and is the figure that determines how long the bank balance lasts.

Formula
Gross burn = Total monthly cash operating expenses
Net burn = Gross burn − Monthly cash revenue
Alternative: Net burn = (Cash at start − Cash at end) / Months
Variables
  • Gross burnall cash going out: payroll, hosting, rent, tools, marketing
  • Net burncash actually consumed after collections
  • Cash revenuemoney collected in the month, not revenue recognised
Worked example
Inputs: $210,000 payroll, $45,000 infrastructure and tools, $30,000 other costs, $160,000 collected revenue
  1. Gross burn: 210,000 + 45,000 + 30,000 = 285,000
  2. Net burn: 285,000 − 160,000 = 125,000
Result: $285,000 gross burn, $125,000 net burn per month
Notes
  • Use cash collected, not recognised revenue. A company invoicing $200,000 on 60-day terms burns as though that revenue does not exist for two months.
  • Averaging over three months smooths lumpy items like annual insurance, tax payments, and quarterly cloud commitments that would otherwise distort a single month.
  • Annual prepaid contracts collect cash upfront, so a month with several renewals can show near-zero or negative net burn. That is timing, not a change in the business.
  • Payroll usually dominates gross burn, so headcount plans and burn plans are effectively the same document.

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Frequently Asked Questions

Yes. Burn Rate Calculator costs nothing, needs no account, and runs right in your browser. There is no paywall, no watermark on the results, and no limit on how many times you can run the numbers.

Burn Rate Calculator uses the standard formula for this kind of calculation, so the output is only as good as the figures you type in. Rates, fees, and rules in finance shift over time, and we review the underlying assumptions on a regular schedule; check the "Last reviewed" date above for the most recent pass. Spotted something off? There's a feedback button in the bottom-right corner.

Burn Rate Calculator | ExaCalc