How this calculator works

Estimate how long recurring savings take to cover an upfront cost.. Simple payback is upfront cost divided by expected recurring savings. If an upgrade costs $300 and saves an estimated $25 a month, simple payback is twelve months. The arithmetic is straightforward, but inputs are estimates and this is not a full financial analysis.

Important assumptions

Subtract ongoing service fees, maintenance, replacement parts and other costs from gross savings. If savings vary seasonally, use a conservative annual estimate divided by twelve. Include installation and accessories in upfront costs.

Common mistakes to avoid

  • Mixing units or time periods.
  • Counting the same fee or tax twice.
  • Treating an estimate as a live quote or guarantee.
  • Ignoring maintenance, waste, exceptions or other costs outside the inputs.

Read the related guide

How to Calculate Simple Payback Before Buying an Upgrade →

This calculator is a planning aid. Verify important amounts with the relevant provider or official source.