Discount Calculator

About this Discount Calculator

The Discount Calculator shows how much a percentage discount removes from an original price and what remains to pay. It is useful for sale shopping, promotional pricing, invoice adjustments and quick comparisons between offers.

Retailers frequently advertise discounts as a percentage off, but stacking multiple discounts, such as a storewide sale plus a coupon, doesn't simply add the percentages together; each discount typically applies to the already-reduced price, which this single-discount calculator doesn't automatically chain, so multiple discounts need to be applied one at a time.

For related tasks, try Percentage Calculator, VAT Calculator or Markup Calculator.

How to use it

1. Enter the original price.
2. Enter the advertised discount percentage.
3. Calculate to see the final price and amount saved.

Practical example

If an item costs 100 and is discounted by 20%, the saving is 20 and the discounted price is 80.

Applying a 20% discount and then a separate 10% discount on the reduced price is not the same as a flat 30% discount; the combined effect works out to a 28% total discount, since the second discount is calculated on the already-lowered price.

Things to double-check

Watch for discounts advertised on the ‘original’ or ‘manufacturer suggested’ price rather than a price the item was ever actually sold at, which can make a percentage-off deal look more significant than the real savings compared to typical selling prices.

Sale price and savings

A percentage discount reduces the price by that share: the sale price is the original price times one minus the discount rate. A 2,500 item at 30 percent off saves 750 and costs 1,750. You can also work backwards: if you only know the sale price of 1,750 and the discount of 30 percent, divide 1,750 by 0.70 to find the original price of 2,500. Remember that a percentage off a higher price is a bigger saving, so 20 percent off a 10,000 item saves more money than 40 percent off a 1,000 item, even though the second number sounds better.

Offers that are not simple percentages

Promotions are often worded in ways that hide the real percentage. Buy one get one free is 50 percent off per item if you take two. Buy two and get the third at half price makes three items cost 2.5 times the unit price, which is about 16.7 percent off in total. A spend 100 and save 10 voucher is a 10 percent discount only if you spend exactly 100; if you add items you do not need to reach the threshold, the effective saving is lower. Convert each offer to the final price per item before comparing, and check whether the discount applies before or after tax and delivery.

Is it really a deal?

A discount is only valuable if the starting price was fair. Compare the sale price with what the item normally sells for, not with the crossed-out original, and check prices at other shops. Look at the unit price when sizes differ, add delivery or return costs, and consider whether you would have bought the item at all. Setting a budget before you shop helps you avoid spending to save. If a seller raised the price shortly before a sale, a 40 percent discount may still leave you paying more than the normal price somewhere else.

Finding the discount from two prices

If you know the original and the sale price, you can find the percentage reduction by dividing the saving by the original price. A jacket reduced from 3,200 to 2,400 saves 800, which is 25 percent. Use the same method to check if a claimed offer is accurate. Remember to include tax where it is added at the till: a sale price of 1,750 with 15 percent tax costs 2,012.50. For online orders, compare the total including delivery, because a small shipping fee can wipe out a modest discount.

Percentage off or amount off?

A percentage and a fixed amount can be compared by finding the price at which they are equal. On a 2,400 item, 20 percent off saves 480, while a voucher for 500 off saves more. The two are equal at a price of 2,500, because 20 percent of 2,500 is 500. Below that price the percentage is worth less than the voucher, and above it the percentage is better. Check the conditions: some vouchers need a minimum spend or cannot be combined with other offers, and a percentage may apply only to selected items.

Worked example: a sale with two reductions

A pair of shoes is listed at 8,000. The shop advertises 25 percent off, and you have a coupon for a further 10 percent off the sale price. After the first discount the price is 6,000, and after the coupon it is 5,400, a total saving of 2,600, or 32.5 percent, not 35 percent. If delivery costs 300 and tax of 15 percent applies to the goods, the final cost is 5,400 times 1.15 plus 300, which is 6,510. Comparing that figure with a competitor who sells the same shoes at 6,800 with free delivery shows that the first offer saves 290, but only if the shoes are the same model and you value the extra effort.

How shops use discounts

Retailers use discounts for different reasons: to clear old stock, to attract customers who would not otherwise visit, or to make a regular price look better by comparison. A price crossed out next to a lower one invites comparison, but the crossed-out price may be a list price that few customers ever paid. Many countries have rules about how a reference price may be advertised, such as requiring the item to have been sold at that price for a period. Be sceptical of urgent countdowns and limited stock claims, and decide in advance what you are willing to pay, so that the discount does not set the price for you.

Margins: what a discount costs the seller

If you run a business, every discount cuts your profit by more than the percentage suggests. An item that sells for 100 with a cost of 70 earns 30. A 20 percent discount reduces the price to 80, leaving 10 of profit, which is a drop of two thirds. To earn the same total profit, you would need to sell three times as many units. This is why many sellers prefer bundles, free delivery thresholds or loyalty points to straight price cuts. Before running a sale, calculate the break-even sales increase, and ask whether the extra customers will come back at full price.

Using discounts wisely as a buyer

A discount helps only when you needed the item anyway. Make a list of planned purchases and watch prices over a few weeks so that you recognise a real reduction. Check the total cost including delivery, tax and return policies, and compare unit prices when sizes differ. Cashback, vouchers and card offers can stack, but read the conditions, because some exclude sale items or require a minimum spend. If a deal tempts you to spend more to qualify, compare the saving with the extra spend: spending 1,000 more to save 300 is a loss of 700. Waiting a day before you buy usually removes the pressure.

Key terms explained

The list price is the normal price before any reduction. A markdown is a permanent price cut, while a promotion is temporary. A coupon is a code or voucher that reduces the price, and stacking means combining several offers. Buy one get one free, often abbreviated BOGO, gives a second item at no charge. The unit price is the price per kilogram, litre or item, which allows fair comparison between sizes. Price anchoring is a tactic of showing a high price first so that a lower one looks like a bargain. Price matching is a promise to meet a competitor's lower price.

Rules of thumb and quick checks

To apply a discount, multiply the price by one minus the rate: 10 percent off is times 0.90, 15 percent is times 0.85 and 25 percent is times 0.75. Two successive discounts do not add: 20 percent off and then another 20 percent off gives 36 percent off, since 0.8 times 0.8 is 0.64. To undo a discount, divide by one minus the rate. Compare the unit price and the final cost with delivery and tax, and ask yourself whether you would buy the item at the normal price.

Read the full guide

Want the background, a step-by-step example and the common mistakes? Read Markup vs Margin: How to Price a Product and Protect Your Profit. Markup and margin are not the same. Learn both formulas, how to convert between them, how to price for a target margin and how discounts reduce profit.

Frequently asked questions