How discounts are calculated
- Single discount: save = price × percent ÷ 100, and the final price is what is left. 20% off $100 saves $20, charging $80.
- One-step shortcut: final = price × (1 − percent ÷ 100). Twenty percent off is the same as multiplying by 0.8.
- Stacked discounts multiply, they never add. "20% off, then an extra 25% off" is 0.8 × 0.75 = 0.6 — an effective 40% off, not 45%. Retailers count on shoppers assuming otherwise.
If you are the one giving the discount rather than taking it, remember every point comes straight out of profit — model the impact on your profit margin first, then price the promotion into your base markup.
FAQ
How do I calculate 20% off a price?
Multiply the price by 0.20 for the discount and subtract it — $100 becomes $80. The one-step version is multiplying by 0.80.
Is 20% off then 20% off the same as 40% off?
No. Discounts stack multiplicatively: 0.8 × 0.8 = 0.64, so you pay 64% — an effective 36% off. This calculator's second-discount field exposes the real combined rate.
How do I find the original price from a sale price?
Divide the sale price by (1 − rate ÷ 100). An $80 tag after 20% off means the original was $80 ÷ 0.80 = $100.
What is the difference between a discount and a markdown?
A discount is a temporary price reduction, usually on demand (coupons, seasonal sales). A markdown is a permanent reduction on slow-moving stock. The arithmetic is identical; the strategy differs.
Does the discount apply before or after tax?
Discounts apply to the pre-tax price in almost every jurisdiction, and tax is then charged on the discounted amount. Take the percent off first, then add sales tax or VAT.
How much margin do I lose on a discounted sale?
All of the discount, plus nothing else — the reduction comes straight out of profit on that unit. A 10% coupon on a product with a 40% margin cuts that margin to about 33%, so promotions cost more than they look.
What does "buy one get one 50% off" really mean?
On two identical items it works out to 25% off the combined price — you pay 1.5× the single price for two units. Enter 25% here to see the same result on any total.