Payback Period Calculator

Written byOleh Soloninupdated 5 October 2026

Investment

Income a month

Costs a month

Monthly profit growth, %

Result

Pays back in, months12
That is, years1
Net profit a month$50,000.00
Without growth, months12
Profit for a year$600,000.00
Annual return, %100%

Investment divided by monthly profit

How many months an investment takes to return, allowing for profit that grows over time.

Payback period is the plainest way to judge a venture: how many months until the money comes back. It is the investment divided by net monthly profit — income less costs.

If profit grows, a plain division overstates the period. So the calculation runs month by month, compounding the growth rate and comparing the running total against the investment.

How to use

Enter the investment — everything spent before the project starts working.
Set monthly income and monthly costs: payback is worked out from the difference.
Add a monthly growth rate if you expect one; the calculation walks month by month and the growth compounds.
Compare against the “without growth” line, which shows what the same project would do on flat profit.

What monthly growth actually buys

Each row is a run of this calculator at an investment of 600,000, income of 150,000 and costs of 100,000 a month — 50,000 net. Only the monthly growth rate changes.

The term shortens far more slowly than the profit grows. Ten percent a month yields nearly twice as much money over the year as flat profit but shortens the payback by only three months: growth gathers force towards the end of the year, and the investment comes back at the beginning.

Runs of this calculator at an investment of 600,000, income of 150,000 and costs of 100,000 a month.
Monthly growth	Pays back in	In years	Without growth	Profit over a year	Annual return
0%	12 months	1	12 months	600,000	100%
1%	12 months	1	12 months	634,125.15	105.69%
2%	11 months	0.92	12 months	670,604.49	111.77%
3%	11 months	0.92	12 months	709,601.48	118.27%
5%	10 months	0.83	12 months	795,856.33	132.64%
10%	9 months	0.75	12 months	1,069,214.19	178.2%

What this calculator shows

Payback in months and in years
The same period without growth, for comparison
Net monthly profit, annual profit and the annual return on the investment

What to keep in mind

Future money is not discounted: a rouble in three years counts the same as one today. Over long projects that flatters the result noticeably.
If income does not exceed costs, profit is zero or negative, and the calculator says the project will not pay back rather than returning an enormous number.

FAQs

What payback period is good?

The calculator sets no standard: an acceptable period depends on the risk, the useful life of the investment and what the alternatives return. The longer the period, the more risk has time to materialise.

Why is inflation not included?

This is simple, undiscounted payback. For projects beyond two or three years, discounted payback — where future money is brought back to today's value — is the correct measure.

What counts as the investment?

Everything spent before the venture turns a profit: equipment, fit-out, first stock, legal costs and working capital for the early months. Forgotten working capital is the usual reason real payback runs longer than planned.

Profit before or after tax?

After. Payback computed on pre-tax profit is systematically optimistic; a simplified-regime turnover tax alone shifts the period noticeably.

What does the “without growth” line calculate?

The investment divided by the first month's net profit: 600,000 ÷ 50,000 = 12. At zero growth it matches the main answer; with growth it shows how much the growth has taken off the term.

What happens if costs swallow the whole income?

The calculator returns an error instead of a number. At zero or negative net profit the money never comes back, and a project like that simply has no payback period.

Worked example

A small outlet

Input: 600,000 invested, 150,000 income and 100,000 costs a month

Output: Pays back in 12 months, a 100 percent annual return

Note: Exactly a year is a good result for a small business. Add two percent monthly profit growth and it shortens to eleven months — over three years that difference becomes decisive.

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