# Software Contract Value Calculator (ACV and TCV)

URL: https://speedycalculator.com/calculators/finance/software-contract-value/
Last updated: 2026-10-25

> The software contract value calculator works out the annual contract value (ACV) and total contract value (TCV) of a SaaS deal from the list price per seat, number of seats, percentage and fixed discounts and contract length.

## Inputs

- List price per user per month
- Seats (users)
- Discount (%)
- Fixed discount per user per month
- Contract length (years, months)
- One-time fees (setup, training)

## Results

- Discounted price per user per month
- Monthly cost
- Annual contract value (ACV)
- Total contract value (TCV)
- Total discount over the contract

## Formula

```
Discounted price per seat = list price × (1 − discount %) − fixed discount
Monthly cost = discounted price × seats
ACV = monthly cost × 12; TCV = monthly cost × contract months + one-time fees
```

## Explanation

Software companies report bookings as ACV (normalised to one year) and TCV (the whole contract). Multi-year deals often come with bigger discounts in exchange for commitment and predictable revenue.

### How to use the Software Contract Value Calculator

- **List price per user per month**
- **Seats (users)**
- **Discount**
- **Fixed discount per user per month**
- **Contract length**
- **One-time fees (setup, training)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the list price per user per month, seats, discounts, contract length and one-time fees.

### Tips

- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.

### Common mistakes to avoid

- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.

### Inputs explained

FieldWhat to enterList price per user per monthAmount in your currencySeats (users)A numberDiscountIn %Fixed discount per user per monthAmount in your currencyContract lengthUnits: years, monthsOne-time fees (setup, training)Amount in your currency

### What each result means

- **Discounted price per user per month** = [List price per user per month]×(1 - [Discount]÷100) - [Fixed discount per user per month]
- **Monthly cost** = [Discounted price per user per month]×[Seats (users)]
- **Annual contract value (ACV)** = [Monthly cost]×12
- **Total contract value (TCV)** = [Monthly cost]×[Contract length] + [One-time fees (setup, training)]
- **Total discount over the contract** = ([List price per user per month]×[Seats (users)] - [Monthly cost])×[Contract length]

### Example values

How the main result changes when **List price per user per month** changes and everything else stays at the example values above:

List price per user per monthAnnual contract value (ACV)22.527,54033.7541,3104555,08056.2568,85067.582,62090110,160

## Worked example

Inputs — List price per user per month: $45; Seats (users): 120; Discount: 15 %; Fixed discount per user per month: $0; Contract length: 3 years; One-time fees (setup, training): $5,000.

Results — Discounted price per user per month = $38.25; Monthly cost = $4,590.00; **Annual contract value (ACV) = $55,080.00**; Total contract value (TCV) = $170,240.00; Total discount over the contract = $29,160.00.

## FAQ

**What is the difference between ACV and TCV?**
ACV is the yearly value of a contract; TCV is its full value including one-time fees.

**Should one-time fees be in ACV?**
Usually not – ACV normally includes recurring revenue only.

**Why offer multi-year discounts?**
They lock in revenue and reduce churn risk.

**What formula does the Software Contract Value Calculator use?**
Discounted price per seat = list price × (1 − discount %) − fixed discount.