How to Calculate a Discount
To calculate a discounted price, multiply the original price by the discount percentage, then subtract that amount from the original price. The formula is:
Discounted price = Original price × (1 − discount rate)
For example, a $80 jacket at 25% off: $80 × (1 − 0.25) = $80 × 0.75 = $60. You save $20.
The Two Core Formulas
Every discount calculation comes down to two questions: what do you pay, and how much do you save?
To find the sale price:
Sale price = Original price × (1 − discount%)
To find the amount saved:
Savings = Original price × discount%
| Original Price | Discount | You Save | You Pay |
|---|---|---|---|
| $50 | 10% | $5.00 | $45.00 |
| $120 | 20% | $24.00 | $96.00 |
| $200 | 30% | $60.00 | $140.00 |
| $350 | 40% | $140.00 | $210.00 |
| $500 | 50% | $250.00 | $250.00 |
The pattern is straightforward: a 10% discount on any price is just that price divided by 10. A 50% discount is the price divided by 2. For any other percentage, the formula above handles it cleanly.
How to Calculate Percentage Off Mentally
You don't always need a calculator. These shortcuts work for quick estimates in stores:
10% rule: Move the decimal one place to the left.
- 10% of $85 = $8.50
20% rule: Find 10%, then double it.
- 20% of $85 = $8.50 × 2 = $17.00
25% rule: Divide by 4.
- 25% of $120 = $30.00
15% rule: Find 10%, add half of that.
- 15% of $80 = $8.00 + $4.00 = $12.00
5% rule: Find 10%, then halve it.
- 5% of $60 = $6.00 ÷ 2 = $3.00
These are faster than punching numbers into a phone during a sale, and accurate enough for most decisions. For exact figures — especially on big purchases — use the calculator above.
Stacked Discounts: When Multiple Sales Apply
Retailers sometimes stack discounts: a 20% sale plus an extra 10% coupon. Many shoppers assume this totals 30% off. It doesn't.
Stacked discounts multiply, not add.
Starting at $100:
- Apply 20% off → $100 × 0.80 = $80
- Apply 10% off → $80 × 0.90 = $72
That's a 28% total discount, not 30%. The math: 1 − (0.80 × 0.90) = 1 − 0.72 = 0.28.
| First Discount | Second Discount | Combined Effect |
|---|---|---|
| 10% | 10% | 19% (not 20%) |
| 20% | 10% | 28% (not 30%) |
| 30% | 15% | 40.5% (not 45%) |
| 50% | 50% | 75% (not 100%) |
This matters most for big-ticket items. A $1,000 TV with two stacked 20% discounts costs $640 — not $600 as you might expect from "40% off." Always calculate step by step, or use the calculator to verify retailer claims.
Adding Sales Tax After the Discount
A common question: does sales tax apply to the original price or the discounted price? In the US and most countries, tax is calculated on the final sale price after any discounts. This works in your favor.
Example: $150 coat, 30% off, 8% sales tax.
- Apply discount: $150 × 0.70 = $105
- Apply tax: $105 × 1.08 = $113.40
If tax were applied to the full $150 first, you'd pay more. Because the law in almost all jurisdictions taxes the actual transaction price, you only pay tax on what you actually spend.
The discount calculator above has an optional tax field — enter your state or local tax rate to get the all-in total. If you want to check the tax rate for your area first, the sales tax calculator covers all US states and major cities.
Finding the Original Price from a Discounted Price
Sometimes you only see the sale price and want to know what it was before the discount. The reverse formula:
Original price = Sale price ÷ (1 − discount%)
Example: A pair of shoes is on sale for $63, marked 30% off. What was the original price? $63 ÷ (1 − 0.30) = $63 ÷ 0.70 = $90
This is useful when comparing prices across stores or verifying that a "sale" price is actually a good deal. Retailers sometimes inflate the "original" price to make discounts look larger. If you can find the item's historical price or check a competitor, you can verify whether the discount is real.
What Percentage Off Is It?
If you know the original price and the current price, and want to calculate the discount percentage:
Discount % = (Original price − Sale price) ÷ Original price × 100
Example: A blender was $80, now $60. ($80 − $60) ÷ $80 × 100 = 20 ÷ 80 × 100 = 25% off
This same formula works for any price comparison — like calculating a percentage increase or decrease between any two values. The percentage calculator handles this and other percentage math in one place.
Is the Discount Actually a Good Deal?
A 50% off sticker doesn't automatically mean you're saving money. A few checks worth making:
Compare the per-unit price. Bulk "deals" are only deals if the per-unit price beats what you'd normally pay. Use the percentage calculator to compare per-ounce or per-item rates.
Check if the item was marked up before the sale. Some retailers raise prices before a sale event, then discount back to the regular price. The effective discount may be zero.
Factor in what you wouldn't have bought otherwise. A 40% discount on something you didn't need still costs 60% of the price.
Account for the total cost, including tax and shipping. A lower sticker price from one retailer can end up costing more once you add shipping. See how it changes the math:
| Item | Price | Shipping | 8% Tax | Total |
|---|---|---|---|---|
| Store A | $89.99 | Free | $7.20 | $97.19 |
| Store B | $79.99 | $9.99 | $6.40 | $96.38 |
| Store C | $75.00 | $14.99 | $6.00 | $95.99 |
Store A has the highest sticker price but isn't the worst total. The numbers sometimes surprise you.
Key Takeaways
- Sale price = Original price × (1 − discount%)
- Stacked discounts multiply, not add — two 20% discounts equal 36% off, not 40%
- Sales tax applies to the discounted price, not the original price
- To reverse-calculate the original price: Sale price ÷ (1 − discount%)
- To find the discount percentage: (Original − Sale) ÷ Original × 100
- A big discount number doesn't guarantee a good deal — compare total costs including tax and shipping
For related calculations, the sales tax calculator helps you figure out your local rate, and the tip calculator is handy when dining out during a promotional deal or prix-fixe event.