Monthly vs. Yearly Subscription: 2025 review

In four years of running a startup, I found that nothing beats the ROI of a pricing update — in 5 minutes of work (backed by days of research), you can increase your bottom line by 5%-10% pretty easily.

This post is going to be quite niche — it’s a sub-topic of pricing, but for the reason above, I thought it could prove quite handy.

So here’s the deal: I checked 50 self-service SaaS products to see how much they discount the yearly plan vs. their monthly fee. Wanna venture a guess? Go ahead. I’ll give the results soon.

This post was massively inspired by Kyle Poyar’s post about pricing pages, so if you haven’t already, I highly recommend you go read that one as well.

The companies I checked

I tried keeping it broad, so I checked larger companies like Adobe and Canva, and small startups like Guidde and Clay. I checked different industries, complex and simple products, and different geos. If you’d like, check out the full list here.

Every pricing page is different: some price by user; some as a global plan. Some have multiple plans with different monthly/yearly ratios. To keep things simple, I chose the ratio for the “recommended” plan for each pricing page.

The results

Tl;dr first: the median yearly/monthly ratio is 125%, or 20% discount. This roughly means that for a monthly fee is $100, the default yearly fee is $80, and $125 monthly goes nicely with $100/mo on an annual basis.

While a baseline is always a good start, it’s worth noting that this ratio is by no means a constant — as many as 9 out of the 50 companies checked have a ratio of 150%. Grammarly was the outlier, with $12 on the annual plan vs $30 paid monthly (which might indicate a high churn problem), but Canva, Clickup and Squarespace all have a high relative monthly fee (or highly discounted yearly plan, if you’re a glass-half-full kind of person).

More Insights

While the baseline and outliers are interesting, there are additional nuances to how pricing is presented:

1. Variability in Ratios Across Plans: Many companies, such as Canva, offer different ratios depending on the plan tier. This suggests a targeted strategy to maximize value perception for certain customer segments.
2. Rounding Practices: Most companies round their prices to whole numbers or end them in “9” (e.g. $59), but a few, such as FreshBooks, have fractional prices that feel less intuitive (e.g., $8.25). This creates complexity, but I honestly have no idea how this affects the buyer’s decision.
3. Default Settings: The default setting on many pricing pages pushes customers toward annual plans, which makes sense — it’s the lower price. However, not all companies do this. Dash.app, for example, defaults to showing the monthly option, which gives a pleasant surprise once you switch to the yearly cost.
4. Transparency in Options: Some companies, such as Wix and Hootsuite, only display one pricing option prominently (monthly or yearly) rather than presenting both side-by-side. This can make it harder for users to evaluate the discount.
5. Tax Inclusion: While most pricing pages include taxes in the displayed price, Hootsuite does not, leading to potential sticker shock at checkout.

One thing is clear — the pricing page conveys the brand. Smaller and heavily user-centeric companies will go for a simple and transparent pricing page, while larger companies often maximize revenue by adding in some tricks and complexities.

When I look at pricing, I do it with a goal in mind — am I trying to move customers towards the yearly option, or just extract more value? Can my low-tier customers handle the increase in pricing, or will that prevent them from ever upgrading?

In any case, I found this small research eye-opening, especially in that there’s no one right way — we have lots of options and creativity around our pricing page.