Free tool
TCV and ACV Calculator
Total contract value (TCV) is every recurring fee over the contract term plus one-time fees. Annual contract value (ACV) is that value per year of the term, and companies differ on whether one-time fees count, so this calculator shows both versions. Enter your term, fees and any yearly price increase to get TCV, ACV and year 1 ARR with a year-by-year table.
Free to use. Runs in your browser: nothing you enter is sent to our servers.
Contract terms
Every figure here comes from you. Nothing is assumed.
1 to 60 months.
Setup, onboarding, implementation. Counted once, in year 1.
Enter the annual recurring amount for each contract year. These replace the recurring fee and the escalator.
Contract value
Contract length is capped at 60 months. The results below use 60.
Total contract value (TCV)
ACV, excluding one-time fees
(TCV minus one-time fees) divided by the term in years
ACV, including one-time fees
TCV divided by the term in years
ARR (year 1)
Year 1 recurring amount, annualized
Teams define ACV differently. Some count recurring revenue only, others include one-time fees. Both are shown so you can use the one your company reports. For a term under 12 months, both figures annualize the contract, so they come out higher than TCV.
| Contract year | Months billed | Annualized rate | Recurring billed | One-time fees | Year total | Cumulative |
|---|---|---|---|---|---|---|
| Total |
Results depend entirely on the numbers you enter. Check them against your own contracts and accounting.
How this was calculated
- Base annual recurring is the recurring fee times the number of billing periods in a year: 12 for monthly, 4 for quarterly, 1 for annual.
- Year n recurring rate is base annual recurring times (1 plus the escalator) raised to the power of (n minus 1). Year 1 has no increase. With ramped pricing on, the rate for each year is the amount you typed for that year instead.
- Partial final year. If the term does not divide evenly by 12, the last year is prorated: annual rate times months in that year, divided by 12. The same proration applies when the term is shorter than one billing period.
- TCV is the sum of recurring billed across every contract year, plus one-time fees.
- ACV, excluding one-time fees is (TCV minus one-time fees) divided by the term in years. The term in years is months divided by 12.
- ACV, including one-time fees is TCV divided by the term in years.
- ARR (year 1) is the year 1 recurring rate expressed as a full 12 months, even when the contract is shorter than a year.
- Discounts, credits, taxes and usage charges are not modeled. Put the net recurring fee in if a discount applies for the whole term.
Build this as a live quote and present it on your next call.
Start a free 30-day trialWhen to use this calculator
Use it when a deal has more moving parts than a monthly price times a number of months: a yearly price increase, a setup fee, a ramp where each year has its own amount, or a term such as 18 or 30 months that ends partway through a year.
The year-by-year table shows what is billed in each contract year, so you can check the total against the order form one row at a time. The two ACV figures sit side by side because companies define ACV differently. Use the one that matches how your company books a deal, and say which one you mean when you quote it. For the definition, see the glossary entry on TCV.
Showing contract value on a live quote
A multi-year quote should show the full commitment, not only the monthly figure. In forquotez you set a contract term on the quote (1, 3, 6, 12, 18, 24, 36, 48 or 60 months) and total contract value appears on the live quote, on the public share page and on every PDF. Change seats, add-ons or the term during the call and the total updates while the buyer watches.
In forquotez, TCV is the monthly total times the term, plus one-time fees, minus one-time credits. See multi-year contracts and TCV for how it looks on a quote.
Frequently asked questions
What is the difference between TCV and ACV?
TCV is the value of the contract over its full term, including one-time fees. ACV is the value per year. A 36-month contract billed at $1,000 a month with no other fees has a TCV of $36,000 and an ACV of $12,000.
Does ACV include one-time fees?
It depends on the company. Some count recurring revenue only, others divide the full contract value by the term. The calculator shows both so you can match your own reporting.
How is the price escalator applied?
The increase compounds once per contract year. With a 5 percent escalator, year 2 is 1.05 times year 1 and year 3 is 1.05 times year 2. Year 1 is never increased.
What happens when the term is not a whole number of years?
The final year is prorated by months. On an 18-month term, year 2 bills 6 of its 12 months at the year 2 rate.
What is the difference between ACV and ARR?
ARR is the recurring revenue a contract produces in a year at its current rate. ACV averages the contract over its term. With flat pricing and no one-time fees the two match. With an escalator on a multi-year term, year 1 ARR is lower than ACV.
What is ramped pricing?
A ramp sets a separate recurring amount for each contract year, for example a lower amount in year 1. Turn on ramped pricing and enter one annual amount per year. Those amounts replace the recurring fee and the escalator.