How the calculation works
Each row is one app. With S seats paid for, P dollars per seat a month and A active users:
- Active users = A as entered, or S × utilization ÷ 100 rounded to the nearest whole seat when you enter a utilization percentage instead.
- Unused seats = S − A.
- Annual spend = S × P × 12.
- Annual waste = unused seats × P × 12: what the unused seats cost at the price you pay.
- Right-size to = active users × (1 + headroom), rounded up to a whole seat, never above today’s seats.
- Right-sizing savings = (S − right-size) × P × 12 a year.
The totals add every app. The waste share is total waste ÷ total spend. Apps marked as duplicates are counted with their annual spend as consolidation candidates, without a saving. SaaS spend per employee = total annual spend ÷ employees, for the apps you entered only.
Assumptions: the price per seat is what you pay after discounts, and is the same for every seat in the row (split an app into two rows if it has two license tiers). Savings are at today’s prices and assume you can reduce seats, which for most contracts means at renewal. Active users are a count you supply; the calculator doesn’t judge whether a light user still needs a seat.
Worked example
A company with 150 employees reviews three apps, keeping 10% headroom:
| App | Seats | Price per seat a month | In use | Duplicate |
|---|---|---|---|---|
| App 1 | 120 | $12.50 | 90 active users | no |
| App 2 | 200 | $8.00 | 65% utilization | no |
| App 3 | 50 | $20.00 | 30 active users | yes |
- App 1: spend 120 × $12.50 × 12 = $18,000. 30 unused seats waste $4,500 a year. Right-size to ⌈90 × 1.10⌉ = 99 seats, saving 21 × $150 = $3,150.
- App 2: 65% of 200 = 130 active. Spend $19,200; 70 unused seats waste $6,720. Right-size to ⌈130 × 1.10⌉ = 143 seats, saving 57 × $96 = $5,472.
- App 3: spend $12,000; 20 unused seats waste $4,800. Right-size to 33 seats, saving $4,080. It is also flagged as a duplicate: $12,000 a year to review for consolidation.
- Totals: $49,200 a year of license spend, $16,020 of it on unused seats (32.6%). Right-sizing with 10% headroom saves $12,702 a year.
- SaaS spend per employee: $49,200 ÷ 150 = $328 a year ($27.33 a month) for these three apps.
Where the numbers come from
Most SaaS admin consoles report assigned licenses and last sign-in dates; a SaaS management platform or software asset management tool can pull them across many apps at once. The price per seat is on the invoice or order form. Before you cut seats, check each contract for minimum seat counts, true-up and true-down rules and the renewal notice date; the contract renewal calculator works out the notice deadline.
