What is the difference between gross burn and net burn?

Gross burn is total monthly operating expenses — payroll, rent, software, marketing, everything spent. Net burn subtracts monthly revenue from gross burn, showing the actual cash shortfall the business has to cover from its bank balance each month.

Can net burn be negative?

Yes — if monthly revenue exceeds gross burn, net burn is negative, meaning the business is cash-flow positive and actually adding to its bank balance each month rather than depleting it.

Which figure should I use to calculate runway — gross or net burn?

Net burn. Gross burn ignores incoming revenue entirely and would understate how long the cash actually lasts for any business with real sales. Runway = Cash on Hand ÷ Net Burn.

Burn Rate Calculator

(Gross & Net Burn Tool)

Build your gross monthly burn from itemized payroll, rent, software, and marketing expenses, subtract revenue for net burn, and see an instant runway estimate.

Step 1 — Monthly Operating Expenses

Payroll ($)

Rent / Office ($)

Software & Tools ($)

Marketing ($)

Other Expenses ($)

Step 2 — Revenue & Cash

Monthly Revenue ($)

Total cash coming in from sales this month

Cash on Hand ($)

Optional — see how long your current cash lasts at this burn rate

Calculated Results

Enter your monthly expenses to calculate gross and net burn rate.

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Gross Burn Tells You What You Spend — Net Burn Tells You What You Lose

Burn rate is often reported as a single number, but gross and net burn answer two different questions. Gross burn is a pure expense total, useful for spotting where money is going. Net burn subtracts revenue and is the number that actually determines how many months of cash are left in the bank.

Gross Burn

Sum of All Monthly Operating Expenses

Net Burn

Gross Burn − Monthly Revenue

Payroll Usually Drives Most of Gross Burn

For most early-stage startups, payroll makes up 60%–80% of total burn, which is why burn rate tends to jump sharply with every new hire rather than creeping up gradually. Tracking burn by category — not just as one lump total — makes it far easier to see which spending decisions actually move the runway number.

Frequently Asked Questions (FAQ)

Generally no — burn rate is meant to represent a repeatable monthly baseline. A one-time expense (like a annual software renewal or equipment purchase) will distort that month's burn and should either be excluded or averaged across the months it actually covers.

Once you know net burn here, plug it into our Startup Runway Calculator alongside your cash on hand for a full runway projection, including an option to model burn growing as you hire.