How to calculate a discount
To find a sale price, multiply the original price by one minus the discount rate. A $120 jacket at 30% off costs 120 × (1 − 0.30) = $84, so you save $36. Another way to think about it: at 30% off you pay 70% of the price. This “percentage you pay” approach is quick to do in your head. At 25% off you pay three quarters, at 40% off you pay 60%, and so on.
The calculator shows the sale price, the amount saved and the total discount as a percentage. If you enter a sales tax rate, it also shows the final price you will pay at the register.
Stacked discounts are not added together
Stores often advertise offers like “30% off, plus an extra 20% off at checkout.” It is tempting to think that adds up to 50% off, but extra discounts are applied to the already-reduced price. On the $120 jacket, 30% off gives $84, and an extra 20% off $84 is $16.80, leaving a price of $67.20. That is a total discount of 44%, not 50%. In general, two discounts of a% and b% combine to 1 − (1 − a)(1 − b). Enter the second discount in the “extra discount” field and the calculator applies it correctly.
The order of the two discounts does not matter mathematically: 20% then 30% gives the same result as 30% then 20%.
Is it really a good deal?
A big percentage off is only meaningful if the original price was realistic. Retailers sometimes inflate the “compare at” price so that the discount looks larger. Before buying, check the price history using a price tracker or compare with other stores. Also compare the discounted price per unit, such as per ounce or per item, especially for multi-packs. A “buy one, get one 50% off” deal is equivalent to 25% off each item if you need two, but it is no saving at all if you only wanted one.
Discounts for sellers
If you run a shop, remember that discounts come straight out of your margin. If an item costs you $60 and sells for $100, your gross margin is 40%. A 20% discount cuts the price to $80 and your margin to $20, which is half your original profit. To make the same total profit, you would need to sell twice as many units. Running the numbers before a promotion helps you choose a discount that brings in customers without giving away all your profit. Our percentage calculator can help you work out margins and markups.
Frequently asked questions
How do I calculate 20% off?
Multiply the price by 0.8. For example, 20% off $75 is $75 × 0.8 = $60.
Is 30% off plus 20% off the same as 50% off?
No. Stacked discounts apply one after the other, so 30% then 20% off equals a 44% total discount.
Is sales tax charged on the original or sale price?
Usually on the discounted price you actually pay, although some manufacturer coupons are taxed on the original price.
How do I find the original price from a sale price?
Divide the sale price by one minus the discount. A $60 item at 25% off was originally $60 ÷ 0.75 = $80.