What is MRR in Singapore? Formula and examples (2026 guide)

Key Takeaways:

• Monthly recurring revenue (MRR) is the normalised monthly value of your active subscriptions. It leaves out one-off fees, Goods and Services Tax (GST), and other non-recurring charges.

• MRR is a management metric, not accounting revenue. Reconcile the two before you share numbers with investors.

• From setting up subscription plans to tracking MRR and managing failed payments, Airwallex Billing helps you handle recurring billing across 130+ currencies.

What is MRR in Singapore, and why do so many SaaS founders track it from their first paying customer?

Simply put, MRR is the predictable revenue your subscriptions bring in each month. It gives you a number to plan hiring, spending, and growth around.

This guide explains what MRR is, how to calculate it, and how it differs from annual recurring revenue (ARR). You will also see how the Singapore context changes the picture, and which SaaS metrics investors read alongside MRR.

What is MRR (monthly recurring revenue)?

Monthly recurring revenue (MRR) is the revenue a subscription business expects to bring in each month from its active customers.

It puts different subscription plans on the same monthly basis, so an annual plan, for example, counts as one-twelfth of its yearly value. One-off charges and taxes aren't included.

MRR is commonly used by software as a service (SaaS) businesses, but it's useful for any business that bills customers regularly, including membership platforms, managed services and AI tools with monthly plans.

The key is knowing which charges to include.

What counts towards MRR:

• Monthly subscription fees from active, paying customers

• Annual and quarterly subscriptions, converted into monthly amounts

• Recurring add-ons, such as extra seats or modules

What doesn't count towards MRR:

• One-off setup, onboarding or implementation fees

• One-off services, such as consulting or training

• GST collected from customers

• Variable usage charges, unless you have a consistent way to account for them, as explained later in this guide

MRR formula: how to calculate monthly recurring revenue

How you calculate MRR depends on how you charge customers. If everyone pays roughly the same amount, you can use an average. If you offer different plans or billing cycles, calculate the monthly value of each plan and add them together.

The basic MRR formula

If most customers pay a similar price, multiply your number of active, paying customers by your average revenue per account (ARPA), which is the average monthly revenue you earn from each customer.

MRR = number of active customers × ARPA

Calculate MRR for different plans

If you offer plans at different prices, calculate the MRR for each plan separately. Multiply the number of customers on each plan by its monthly price, then add the totals together.

For annual and quarterly subscriptions, divide the amount paid by the number of months covered. For example, a customer paying S$2,160 a year contributes S$180 to MRR each month. A customer paying S$1,500 per quarter contributes S$500 each month.

Here's an example of how this works for a Singapore SaaS business with 38 paying customers:

In the above example, the business has S$5,400 in MRR. To calculate ARPA, divide S$5,400 by 38 customers, giving about S$142 per customer per month.

You can then multiply ARPA by the number of customers to get back to the same MRR. This works when ARPA is calculated using the same customer base and period.

Don't want to calculate subscription revenue manually? Airwallex Subscription Management helps you manage subscription plans, automate recurring billing and track MRR alongside metrics such as active subscriptions and churn.

Types of MRR and net new MRR

Your MRR changes as you gain customers, existing customers change plans, or customers leave. Tracking these changes separately helps you understand what's driving growth and where you're losing revenue.

Starting with the S$5,400 MRR from the earlier example, here's how each type of MRR movement works.

Some businesses include reactivation MRR under new MRR instead. Either approach can work, as long as you use the same method consistently.

How to calculate net new MRR

Net new MRR is the total change in MRR over a month. Add the revenue gained from new customers, upgrades and returning customers, then subtract the revenue lost through downgrades and cancellations.

Using the example above:

The business added S$650 in net new MRR during the month, bringing its total t o S$6,050. That closing MRR becomes the opening MRR for the following month.

MRR for Singapore businesses: currency, GST and pricing models

If your business sells overseas, charges GST or offers usage-based pricing, you'll need clear rules for calculating MRR. The important thing is to apply the same rules every month so you can compare your numbers over time.

Choose a reporting currency and exchange rate

If your business reports MRR in Singapore dollars, you'll need to convert payments in other currencies. For example, a customer paying US$100 a month will contribute a different amount to your reported MRR as the exchange rate changes.

Choose a consistent exchange rate source and decide when to apply the rate, such as using the monthly average. You can also track MRR at a fixed exchange rate to separate changes in revenue from currency movements.

For GST reporting, IRAS has rules on converting foreign-currency amounts into Singapore dollars. Make sure your tax calculations follow the applicable requirements.²

Bill customers in different currencies? Airwallex Subscription Management helps you manage subscription billing and payment data in one place, making it easier to track recurring revenue across markets and reconcile payments against your records.

Exclude GST from MRR

GST is collected on behalf of the government, so it isn't revenue your business earns. Singapore's current GST rate is 9%.¹

For example, if a customer pays S$109, including 9% GST, your MRR is S$100, not S$109. Check whether GST applies to each sale, as the rules can differ depending on the customer and transaction.

Decide how to count usage-based and AI pricing

MRR is straightforward when customers pay a fixed monthly fee. It gets more complicated when charges depend on usage and vary from month to month.

You could count only the minimum amount customers have committed to pay and track usage charges separately. Alternatively, you could use average usage charges over the previous three months. Whichever approach you choose, explain it clearly and apply it consistently.

Account for discounts, free trials and failed payments

Use the amount customers actually pay, rather than the standard list price, when calculating MRR. Don't count free trials as MRR until customers start paying.

Failed payments need a consistent rule too. You might keep a subscription in MRR while payment recovery is underway, then remove it once it meets your definition of churn. The important thing is to apply the same cut-off rule each month.

Document your approach in a short MRR policy covering:

• Reporting currency and exchange rate source

• Whether you track MRR at a fixed exchange rate

• How you exclude GST

• How you account for usage-based charges

• How you treat discounts, free trials, failed payments and returning customers

ARR vs MRR: which metric should you use?

Monthly recurring revenue (MRR) measures the monthly value of your active subscriptions. Annual recurring revenue (ARR) shows that value over a year. MRR is useful for tracking month-to-month changes, while ARR gives you a longer-term view of recurring revenue.

The basic formula is ARR = MRR × 12.

Using the S$6,050 closing MRR from our earlier example, the ARR would be S$72,000.

This calculation works best when subscriptions are relatively predictable.

It can be less reliable if your business has variable usage charges, contracts with prices that change over time, or customers paying in different currencies. In these cases, explain how you calculate ARR and use the same method when comparing figures.

MRR vs accounting revenue: what to reconcile

MRR measures the monthly value of recurring subscriptions, while accounting revenue is recognised according to when a business delivers its goods or services. The two figures can differ when customers pay upfront for annual subscriptions.

For example, if a customer pays S$2,160 upfront for a 12 month subscription, the business records S$180 in MRR each month. It would also generally recognise S$180 in revenue each month, rather than recognising the full S$2,160 as revenue when payment is received.

The upfront payment increases cash immediately, but the portion relating to services not yet delivered is generally recorded as deferred revenue. In Singapore, SFRS(I) 15 governs how companies recognise revenue from customer contracts.

Common MRR mistakes to avoid

Most MRR errors come from applying inconsistent rules, rather than getting the maths wrong. Before reporting your numbers to your team or investors, check that you’re avoiding these common mistakes.

• Including one-off fees or GST. Setup fees, consulting services and GST collected from customers are not recurring revenue. Exclude them from MRR.

• Counting an annual payment as one month of MRR. A customer who pays S$2,160 upfront for a year contributes S$180 in MRR, not S$2,160.

• Using the contract price instead of the amount the customer pays. Account for discounts and start counting MRR when the paid subscription begins, based on your documented rules.

• Counting the same revenue twice. An upgrade should count as expansion MRR, not as both expansion MRR and new MRR.

• Converting currencies inconsistently. Convert revenue to SGD using a consistent exchange-rate method. You can also track MRR at fixed exchange rates to separate underlying growth from currency movements.

• Keeping cancelled or non-paying customers in MRR. Apply a consistent policy for cancellations and failed payments, and move lost recurring revenue into churned MRR when appropriate.

• Including free trials. A free trial contributes no MRR until the customer starts a paid subscription.

• Changing your definition without updating historical figures. If you change your calculation method, recalculate previous months where possible so you can compare trends consistently.

As a final check, make sure every amount in your MRR can be traced to a paying subscription that qualifies under your reporting rules. If you can’t explain where a figure came from, review it before including it in your total.

How to track MRR: spreadsheet vs billing software

The best way to track MRR depends on your customer base, pricing model and billing complexity. A spreadsheet may be enough when you're starting out, but billing software can reduce manual work as your subscriptions grow.

When a spreadsheet is enough

A spreadsheet can work well if you have a small customer base, straightforward pricing and transactions in one currency.

If you’re using a spreadsheet, here’s how to set it up:

1. Create one row per customer, with columns for their plan, billing frequency, currency, monthly subscription value, start date and subscription status.

2. Add a separate tab to track new, expansion, contraction and churned MRR each month.

3. Review the figures regularly and make sure they follow the same calculation rules.

As your customer base grows, keeping the spreadsheet accurate may take more time, especially when customers change plans or cancel.

When to move to billing software

Consider billing software when you have multiple currencies, annual subscriptions, usage-based pricing or frequent payment failures to manage.

Depending on the platform, it can automate recurring invoices, track subscription changes and give you a clearer view of your billing data. This reduces manual updates and makes it easier to investigate how your reported MRR was calculated.

Our guide to recurring payments explains how automated billing works.

Where Airwallex Subscription Management fits

Airwallex Subscription Management helps you manage subscription plans, free trials and discounts, and automatically retry failed payments. Its dashboard brings metrics such as MRR, active subscriptions, churn and overdue payments together in one place.

With support for billing in 130+ currencies, Airwallex Subscription Management helps businesses manage subscriptions across markets while keeping track of recurring revenue and payment performance.

You can sign up for an Airwallex account fully online; there are no monthly fees, signup fees or minimum balance requirements on the free Explore plan.

Frequently asked questions (FAQs)

What does MRR mean for Singapore businesses?

MRR stands for monthly recurring revenue. It is the predictable monthly value of your active subscriptions, with annual and quarterly plans converted to a monthly amount. Singapore SaaS and subscription businesses use it to plan spending and report growth. It leaves out one-off fees and GST.

How do you calculate MRR for a SaaS company?

Multiply your active customers by your average revenue per account (ARPA). Or add up each plan’s customers multiplied by that plan’s monthly price. Convert annual and quarterly plans to monthly amounts first, so S$2,160 paid yearly counts as S$180 a month. Alternatively, Airwallex Subscription Management helps you track MRR alongside other subscription metrics, while managing subscription plans and automating recurring billing.

Is MRR the same as revenue?

No. MRR is a management metric that shows recurring revenue on a monthly basis. Accounting revenue follows reporting rules and includes one-off items such as setup fees. The two often differ because of timing, deferred revenue, and non-recurring charges, so reconcile them each month.

Does MRR include GST?

No. GST is tax you collect for the government, not revenue you earn. The current rate is 9%,¹ so a S$109 payment that includes GST adds S$100 to your MRR. Check with IRAS or your tax adviser on whether GST applies to each customer.

What is the difference between ARR and MRR?

MRR measures recurring revenue per month, and annual recurring revenue (ARR) measures it per year. ARR is usually MRR × 12, but that shortcut can mislead when you have usage charges, ramped contracts, or currency swings. Early-stage teams often lead with MRR, and companies with annual contracts often lead with ARR.

What is a good MRR for a SaaS startup in Singapore?

There is no single good number, because it depends on your price point, stage, and market. Investors tend to look at growth rate, retention, and whether your MRR definition holds up under review, not MRR alone. Track your own trend month to month, and compare yourself with companies at a similar stage and contract size.

Sources:

1. https://www.iras.gov.sg/quick-links/tax-rates/goods-and-services-tax-(gst)-rates

2. https://www.iras.gov.sg/taxes/goods-services-tax-(gst)/charging-gst-(output-tax)/foreign-currency-transactions