Discount Calculator

How to Calculate Discounts

Calculating a discount involves multiplying the original price by the discount percentage divided by 100, then subtracting that amount from the original price. For example, a 25 percent discount on a $120 item means you save $30 (120 multiplied by 0.25), and the final price is $90. This calculator handles all the math instantly as you adjust the slider. — also see our percentage calculator. — also see our fraction calculator. Use the unit price calculator for related calculations. Related: use the Percentage Calculator to go further, or the Percentage Change Calculator for a different angle.

Stacking Discounts

When multiple discounts are applied (for example, a 20 percent store sale plus an additional 10 percent coupon), the discounts are applied sequentially, not added together. A $100 item with 20 percent off becomes $80, and then 10 percent off $80 becomes $72. This is different from a single 30 percent discount, which would result in a $70 final price. Understanding this difference helps you evaluate whether stacked promotions are truly better deals.

Price Per Unit Comparison

When comparing deals, always calculate the price per unit to determine the best value. A larger package with a smaller discount might still be more expensive per unit than a smaller package with a bigger discount. For example, a 16-ounce bottle at 20 percent off ($3.20) is more expensive per ounce than a 12-ounce bottle at 30 percent off ($2.10), even though the total savings amount differs.

Common Retail Discount Strategies

Retailers use various discount strategies to attract customers. Percentage-off sales (like 25 percent off) are the most straightforward. Buy-one-get-one (BOGO) deals are effectively 50 percent off when you need two items. Clearance markdowns typically start at 30 percent and increase over time. End-of-season sales often offer the deepest discounts, sometimes reaching 70 to 80 percent off original prices. Understanding these patterns helps you time your purchases for maximum savings.

How discounts work — the maths behind sales

A discount is a reduction from the original price of a product or service, expressed as a percentage of the original price. Understanding how to calculate discounts quickly allows you to compare actual prices across stores, verify advertised deals, calculate the cash savings on large purchases, and identify which "deal" truly offers the best value.

Discount Amount = Original Price × (Discount % ÷ 100)

Sale Price = Original Price – Discount Amount = Original Price × (1 – Discount % ÷ 100)

Example: A laptop priced at $65,000 with a 15% discount:

• Discount amount = $65,000 × 0.15 = $9,750
• Sale price = $65,000 – $9,750 = $55,250
• Or directly: $65,000 × 0.85 = $55,250

Finding the original price from the sale price

When you see a sale price and want to know the original price before the discount:

Original Price = Sale Price ÷ (1 – Discount % ÷ 100)

Example: A jacket is $2,720 after a 20% discount. Original price = $2,720 ÷ 0.80 = $3,400

This reverse calculation is useful for verifying whether a "20% off" claim is genuine when you see the sale price but not the original.

Finding the discount percentage from two prices

Discount % = [(Original Price – Sale Price) ÷ Original Price] × 100

Example: Original price $4,500, sale price $3,375. Discount % = [(4,500 – 3,375) ÷ 4,500] × 100 = [1,125 ÷ 4,500] × 100 = 25%

Why are two 20% discounts not the same as one 40% discount?

When multiple discounts are applied one after another, they do NOT simply add. Two 20% discounts do not equal a 40% total discount.

Example: $10,000 product with 20% off, then another 10% off:

• After first 20%: $10,000 × 0.80 = $8,000
• After second 10%: $8,000 × 0.90 = $7,200
• Total savings: $2,800 (28% total discount, not 30%)

Formula for combined successive discounts: Combined % = a + b – (a × b ÷ 100)

20% then 10%: 20 + 10 – (20 × 10 ÷ 100) = 30 – 2 = 28% total

Retailers use this to make successive discounts appear more generous than they are. "20% off, then extra 10% off" sounds like 30% — but it's 28%.

Discount strategies retailers use

• Anchor pricing: Showing an inflated "original" price crossed out next to the sale price. The higher the fake original, the better the discount appears. Always research the actual market price before buying.
• Bundle discounts: "Buy 2, get 30% off." Calculate the per-unit price of the bundle versus buying individually to determine the actual saving.
• Category discounts: "Up to 50% off" means some items have that discount — typically end-of-line or unpopular items. Most items may be 10–20% off.
• Coupon stacking: Applying a coupon to an already-discounted item uses the successive discount formula. A 10% coupon on a 40% sale item gives: combined = 40 + 10 – (40 × 10 ÷ 100) = 50 – 4 = 46% total discount.

GST and discounts — order matters

When a product is discounted and also subject to GST, the order of calculation affects the final price. Under global GST rules, GST is applied on the transaction value (the discounted price), not the original price. A $10,000 item at 18% GST with a 20% discount:

• Correct: $10,000 × 0.80 = $8,000 (after discount). Then GST: $8,000 × 1.18 = $9,440 final price
• Incorrect: $10,000 × 1.18 = $11,800 (GST first). Then 20% off: $11,800 × 0.80 = $9,440 — same result in this case

The order does not affect the final price mathematically, but GST is always calculated on the discounted price, not the pre-discount price, per GST guidelines.

Frequently asked questions

What is the difference between a discount and a rebate? A discount reduces the price at the point of sale. A rebate is a partial refund issued after purchase — you pay full price and receive the rebate later (often by mail or bank transfer). Rebates are often used to make products appear cheaper while benefiting from the fact that many buyers never claim them.

How do I calculate 30% off $1,500 quickly in my head? Find 10% ($150), multiply by 3 ($450). Sale price = $1,500 – $450 = $1,050. Or: 30% off means you pay 70%. $1,500 × 0.7 = $1,050.

Is a higher discount percentage always a better deal? Not necessarily. A 50% discount on an inflated price may cost more than a 10% discount on a fairly priced item. Always compare the actual sale price against the market rate for the product, not just the discount percentage.

Discount percentage to savings calculator

Successive discounts — not the same as combined

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