How to Calculate Discounts
Whether you're shopping a sale, comparing deals, or running a business setting prices, understanding how discounts work is essential. There are three common discount calculations:
- Find the sale price: "A $80 jacket is 25% off — what do I pay?"
- Find the savings: "How much do I save on a $120 item at 30% off?"
- Find the discount percentage: "A $60 item is now $45 — what percent off is that?"
The Discount Formulas
1. Calculate the Sale Price
Sale Price = Original Price × (1 - Discount% / 100)
Example: A $80 jacket at 25% off: $80 × (1 - 0.25) = $80 × 0.75 = $60
2. Calculate the Dollar Savings
Savings = Original Price × (Discount% / 100)
Example: A $120 item at 30% off: $120 × 0.30 = $36 savings
3. Calculate the Discount Percentage
Discount % = ((Original - Sale Price) / Original) × 100
Example: Was $60, now $45: (($60 - $45) / $60) × 100 = 25% off
Quick Discount Reference Table
| Original Price | 10% Off | 20% Off | 25% Off | 30% Off | 50% Off |
|---|---|---|---|---|---|
| $25 | $22.50 | $20.00 | $18.75 | $17.50 | $12.50 |
| $50 | $45.00 | $40.00 | $37.50 | $35.00 | $25.00 |
| $75 | $67.50 | $60.00 | $56.25 | $52.50 | $37.50 |
| $100 | $90.00 | $80.00 | $75.00 | $70.00 | $50.00 |
| $150 | $135.00 | $120.00 | $112.50 | $105.00 | $75.00 |
| $200 | $180.00 | $160.00 | $150.00 | $140.00 | $100.00 |
Stacking Discounts: How Multiple Discounts Work
If a store offers 20% off plus an extra 10% off, the total discount is not 30%. The second discount applies to the already-reduced price:
- $100 item at 20% off = $80
- Extra 10% off $80 = $72
- Total savings: $28 = 28% total discount (not 30%)
General formula for stacking: Total Discount = 1 - (1 - d1) × (1 - d2)
For 20% + 10%: 1 - (0.80 × 0.90) = 1 - 0.72 = 0.28 = 28%
Discount After Sales Tax
In most US states, sales tax is applied after the discount. So a $100 item at 20% off with 8% tax:
- Discount: $100 × 0.80 = $80
- Tax: $80 × 0.08 = $6.40
- Total: $86.40
Frequently Asked Questions
Is it better to get a flat $10 off or 10% off?
It depends on the price. On a $50 item, 10% off saves $5 — so $10 off is better. On a $150 item, 10% off saves $15 — so the percentage is better. The breakeven point is when the item costs exactly $100.
How do I calculate the original price from a sale price?
Divide the sale price by (1 - discount/100). If something is $60 after a 25% discount: $60 / 0.75 = $80 original price.
What does "up to 50% off" really mean?
It means the maximum discount on any item in the sale is 50%. Most items will have smaller discounts. Stores lead with the highest discount to attract attention, but the average discount is usually much lower.