Cash Back Calculator

Net cash back, first year —

Cash back from spending per year: —
Net per year after year one: —
Average per month: —
Blended cash back on all spend: —
Spend needed to cover the fee: —

Cash back per year is monthly spend × 12 × the reward percentage, added up for each category, then minus any annual fee. Spending $1,000 a month on a flat 1.5% card returns $180 a year. Add a bonus category and a sign-up offer to compare a tiered card against a flat one.

About this tool

Reward cards advertise percentages, but what matters is the dollar figure left after the annual fee. This calculator takes your typical monthly spending in two buckets, an everyday tier and one bonus category such as groceries or fuel, and multiplies each by its cash back percentage over twelve months. It then adds a one-time sign-up offer for the first year and subtracts the annual fee, so you see both a first-year figure and the steady figure for later years. The blended percentage and the yearly spend needed to cover the fee make two cards easy to compare. One limit: it assumes the bonus percentage applies to every bonus dollar, so quarterly caps or rotating categories will lower the real number.

How to use it

Enter everyday spending
Type what you put on the card in a normal month and the base cash back percentage.
Add a bonus category
If the card pays more on groceries, fuel or dining, enter that monthly spend and its higher percentage.
Add costs and offers
Fill in the annual fee and any one-time sign-up bonus in dollars.
Read the results
Compare the first-year net, the later-year net and the blended percentage across cards.

Examples

$1,000 a month on a flat 1.5% card

Everyday monthly spend: 1000
Everyday cash back: 1.5

Result Net cash back, first year: $180.00
Cash back from spending per year: $180.00
Net per year after year one: $180.00
Average per month: $15.00
Blended cash back on all spend: 1.5%
Spend needed to cover the fee: No fee

Everyday: $1000 × 12 × 1.5% = $180.00
Bonus category: $0 × 12 × 0% = $0.00
Net first year = $180.00 + $0 sign-up − $0 fee = $180.00

Twelve months of $1,000 is $12,000; 1.5% of that is $180 with no fee to subtract.

1% everyday, 3% on groceries, $95 fee

Everyday monthly spend: 800
Everyday cash back: 1
Bonus-category monthly spend: 400
Bonus-category cash back: 3
Annual fee: 95
One-time sign-up bonus: 200

Result Net cash back, first year: $345.00
Cash back from spending per year: $240.00
Net per year after year one: $145.00
Average per month: $20.00
Blended cash back on all spend: 1.67%
Spend needed to cover the fee: $5,700 a year

Everyday: $800 × 12 × 1% = $96.00
Bonus category: $400 × 12 × 3% = $144.00
Net first year = $240.00 + $200 sign-up − $95 fee = $345.00

$96 plus $144 from spending, plus a $200 sign-up offer, minus the $95 fee gives $345 in year one and $145 after.

Light spender on a $95-fee card

Everyday monthly spend: 200
Everyday cash back: 1
Annual fee: 95

Result Net cash back, first year: -$71.00
Cash back from spending per year: $24.00
Net per year after year one: -$71.00
Average per month: $2.00
Blended cash back on all spend: 1%
Spend needed to cover the fee: $9,500 a year

Everyday: $200 × 12 × 1% = $24.00
Bonus category: $0 × 12 × 0% = $0.00
Net first year = $24.00 + $0 sign-up − $95 fee = -$71.00

$2,400 a year at 1% earns $24, which does not cover a $95 fee.

How it is calculated

Net = (S₁ × 12 × p₁ + S₂ × 12 × p₂) ÷ 100 + B − F

S₁, S₂: Monthly spend in the everyday and bonus categories
p₁, p₂: Cash back percentages for those categories
B: One-time sign-up bonus, counted in year one only
F: Annual fee

Each category earns its percentage on twelve months of spending. The sign-up bonus is added only to the first-year figure; the later-year figure is spending rewards minus the fee. The blended percentage divides spending rewards by total yearly spend, and the fee break-even spend is the fee divided by that blended percentage.

Sources

Credit cards — Consumer Financial Protection Bureau

When not to use it

Skip it if you carry a balance month to month, since card charges outweigh rewards.
It does not model points or miles with variable redemption values.
Rotating quarterly categories with spending caps need a per-quarter estimate instead.

Common mistakes

Counting the sign-up bonus every year instead of once.
Entering yearly spend in a field that expects a monthly figure.
Putting all spending in the bonus bucket when the higher percentage covers only some purchases.
Forgetting that a $95 fee needs thousands in spend before a premium card beats a no-fee one.

Frequently asked questions

How is the blended cash back percentage worked out?

It is total yearly cash back from spending divided by total yearly spend. With $800 a month at 1% and $400 a month at 3%, you earn $240 on $14,400, a blended 1.67%. It excludes the sign-up bonus and the fee so cards can be compared on spending alone.

Why are there two net figures?

The sign-up bonus is paid once, so year one usually looks far better than later years. The later-year figure is spending rewards minus the annual fee, which is the number that decides whether keeping the card makes sense.

What does the fee break-even spend mean?

It is the yearly spend at which rewards exactly pay the annual fee at your blended percentage. A $95 fee at 1.67% needs about $5,700 of spending a year before the card earns anything net.

Is cash back taxable income?

In the United States, rewards earned on purchases are generally treated as a rebate on spending rather than income. Bonuses paid without a spending requirement can be treated differently, so check the issuer's tax documents.

Does a spending cap on the bonus category change the result?

Yes. Many cards pay the higher percentage only up to a quarterly or yearly limit and the base percentage after that. Enter only the spend under the cap as bonus spend and move the rest to everyday spend.

Should I spend more to earn more cash back?

Extra spending to chase rewards rarely pays off: 2% back on a $500 purchase returns $10 while the purchase costs $500. The figures here are most useful for spending you would make anyway.