How to use the annual vs monthly plan calculator
- Enter the monthly price and the annual price from the plan page.
- Enter the number of months you expect to use the service. Use a number below 12 if you may cancel early.
- Read which plan is cheaper for that length of use and by how much.
- Check the break-even point, which is the number of months at which the annual plan starts to cost less than paying monthly.
Formula
Monthly plan for a year = monthly price x 12
Saved with the annual plan = monthly plan for a year - annual price
Break-even months = annual price / monthly price
Effective monthly price on the annual plan = annual price / 12
For stays that are not whole years, the annual plan is paid in whole years, so 13 months of use costs two annual payments.
$15 a month or $150 a year
Paying monthly costs $15 x 12 = $180 a year. The annual plan costs $150, so it saves $30 a year, which is 16.7% off, and works out to $12.50 a month. The annual plan costs 83.3% of the monthly total.
Break-even comes at $150 / $15 = 10 months. If you use the service for only 6 months, monthly billing costs $90 and the annual plan $150, so monthly is cheaper by $60. At 13 months, monthly costs $195 and annual needs two payments, $300.
Deciding with the break-even point
The break-even number is the simplest guide. If you are sure to use the service longer than that, the annual plan costs less. If you might stop sooner, monthly billing keeps the risk low. The saving is only a saving if you actually keep the subscription.
Look at the annual price as a share of twelve months. A plan that costs 10 months of the monthly price has a break-even of 10 months.
Things the prices do not show
Some providers raise prices at renewal, offer refunds for annual plans or include extras only with one option. This tool compares the prices you enter. To add up everything you pay for in a month, use the subscription cost calculator.
For other pay-up-front choices, see the membership break-even calculator, and the cost per use calculator when the question is how much each use costs.
Assumptions and limits
- Prices stay the same for the whole period, with no renewal increase.
- Taxes, fees, trials and refunds are not included.
- The annual plan is paid up front in whole years.
- Months of use must be a whole number from 1 to 600.
Frequently asked questions
Is an annual plan cheaper than monthly?
It is cheaper if you use the service longer than the break-even point, which is the annual price divided by the monthly price. At $15 a month and $150 a year, that is 10 months.
How do I find the monthly price of an annual plan?
Divide the annual price by 12. A $150 annual plan works out to $12.50 a month.
What if I might cancel before a year?
Enter the months you expect to use it. The tool compares the monthly total with the annual price and tells you which is cheaper for that length of use.
Does this include renewal price changes?
No. It uses the prices you enter for the whole period. If the provider raises prices at renewal, enter the later prices to see the effect.