SaaS Annual Plans Come 27% Off on Average vs 17% for the 'Two Months Free' Rule

A buyer on a SaaS pricing page flips the billing toggle from monthly to yearly. The price per month drops, and a small badge says "Save 25%." They are being asked to commit for a year up front, and the discount is the reason to say yes.

For a SaaS company, annual billing is cash in advance and a customer locked in for twelve months, so the discount is one of the most important numbers on the pricing page. Set it too low and few buyers switch; set it too high and the company gives away revenue it would have earned anyway. Knowing where the market sits helps set it deliberately.

SaaS companies that state an annual discount offer 27% off on average, with a median of 25%. That is deeper than the "two months free" rule many teams start from, which works out to about 17%: only 5 of the 16 companies sit in the 16% to 20% range around it, and 9 offer more.

On September 23, 2026 we loaded the pricing pages of 71 SaaS companies that rank in Google search for SaaS and IT keywords, and read each page for annual-billing offers. 53.5% mentioned annual or yearly billing, and 16 stated the discount as a number.

An annual discount is a stated percent off, or a number of months free, for paying yearly instead of monthly. Months free are converted to a share of the year, so "two months free" is about 17%. The median is the middle discount when the 16 are lined up from smallest to largest; the average adds them up and divides by 16.

The median is 25%, a quarter off, and more than half the stated discounts, 9 of 16, fall between 20% and 33%. The spread is wide: the deepest stated discount is 50%, half off for paying yearly, and the shallowest is 15%. The three deepest discounters, at 38%, 40% and 50%, pull the average above the median.

20% is the single most common stated figure, used by three companies, and 15%, 25% and 33% follow with two each. Round figures like these are easy to show on a billing toggle, and buyers read them at a glance.

"Two months free" is a common rule of thumb for annual plans: pay for ten months, get twelve. It works out to about 17% off. Only 5 of the 16 stated discounts sit in the 16% to 20% range around it. Of the other 11, 9 are higher and 2 are lower, at 15%.

In practice, SaaS companies that state their discount are more generous than the rule suggests. A company offering two months free is below the median of 25% and below 9 of the 16 companies that publish a figure, which matters if buyers compare annual savings across tools.

A yearly plan is standard on SaaS pricing pages, but most pages that offer one do not put a number on the saving. 16 of the 71 pages state a percentage or months free; the rest of the pages that mention yearly billing leave the saving unstated.

A stated number is easier to act on. "Save 20%" reads in a second; two prices, one monthly and one yearly, ask the buyer to do arithmetic at the moment they are deciding.

If you are setting an annual discount, 20% to 25% puts you in the middle of the market. Going below 17% puts you under all but 2 of the 16 companies that state a discount, and going above 33% puts you with the three deepest discounters. Pick the figure that matches how much the upfront cash and lower churn are worth to you, not the rule of thumb.

Whatever the discount, state it as a number next to the billing toggle, and test whether leading with the yearly price changes how many buyers choose it. A cro consultant can run that pricing-page test and measure the effect on annual sign-ups and revenue.

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