How Discounts Are Calculated
See how sale prices and savings are worked out.
Published by QuickUtilaUpdated 3 min read
A “25% off” sign tells you the discount rate, but not what you will actually pay. Working out the sale price takes two quick steps: find the saving, then subtract it from the original price.
Step 1: Calculate the amount saved
Step 2: Subtract the saving
- 1Saving: 80 × 0.25 = 20
- 2Sale price: 80 − 20 = 60
Therefore: You pay 60 and save 20.
You can combine the two steps: multiply the original price by (1 − discount ÷ 100). For 25% off, multiply by 0.75.
Stacked discounts
When a store offers “an extra 10% off sale prices”, the second discount is applied to the already-reduced price, not the original. That means two discounts are worth less than their sum.
- 1First discount: 100 × 0.80 = 80
- 2Second discount: 80 × 0.90 = 72
Therefore: The total discount is 28%, not 30%.
Finding the discount rate from two prices
If you know the original and sale prices, subtract the sale price from the original, divide by the original and multiply by 100.
For a jacket reduced from 120 to 90: (30 ÷ 120) × 100 = 25% off. This is a percentage decrease, so the Percentage Calculator Increase / Decrease tab gives the same answer.
Discounts and sales tax
Where sales tax is added at the checkout, it is usually calculated on the discounted price. Apply the discount first, then add tax to the sale price.
Compare offers before you choose a coupon
| Offer on a price of 100 | You pay | You save |
|---|---|---|
| 20% then 10% | 72.00 | 28.00 |
| Single 30% | 70.00 | 30.00 |
| Single 25% | 75.00 | 25.00 |
Against 30% off, the stacked offer costs 2 more. Against 25% off, it saves 3 more. Compare the actual payable amount; adding the two percentages gives the wrong answer.
When the lowest item price is not the best deal
- 1Offer A: item 72 + delivery 5 = 77
- 2Offer B: item 75 + free delivery = 75
Therefore: Offer B costs 2 less at checkout even though its item discount is smaller.
The calculator excludes shipping, taxes and fixed-value coupons. Check minimum-spend requirements, excluded brands and whether a coupon applies before or after another promotion. Merchant rules and rounding can change the final bill.