Discount Calculator

Understanding Discounts and How to Calculate Them

A discount reduces the selling price of an item by a fixed amount or a percentage of the original price. Percentage discounts are the most common format used in retail, e-commerce, and B2B pricing. The basic formula is straightforward: multiply the original price by the discount rate as a decimal, then subtract from the original price. For a 25% discount on a $200 item, you calculate 200 x 0.25 = $50 savings, giving a final price of $150.

Where calculations become more interesting is with stacked discounts. Many promotions combine discounts — a store-wide 20% off plus an additional 10% loyalty discount, for example. These do not simply add together. A 20% discount followed by a 10% discount on a $100 item gives you $100 x 0.80 = $80, then $80 x 0.90 = $72. The effective discount is 28%, not 30%. Each subsequent discount applies to the already-reduced price, which is why the combined effect is always less than the arithmetic sum.

Tax after discount is another common consideration. In most countries, sales tax or VAT is calculated on the discounted price, not the original price. This means a 10% tax on a $72 discounted item adds $7.20, not $10. This calculator handles the correct order of operations automatically — all discounts are applied first, then tax is calculated on the reduced price. This matches the legal requirements in the US, UK, EU, Australia, Canada, and India.

The Compare Deals feature helps you evaluate which promotion offers better value. This is especially useful when comparing a percentage discount against a quantity-based deal like "Buy 2 Get 1 Free". The per-unit cost comparison cuts through marketing language to show you which deal actually saves more money. For example, 30% off a $50 item gives you a per-unit cost of $35, while buying 3 items at $20 each but only paying for 2 gives a per-unit cost of $13.33 — making the second deal significantly better if you need multiple items.

All calculations run entirely in your browser. Nothing is stored, transmitted, or tracked. Choose your currency, enter your numbers, and get instant results with a clear visual breakdown of what you pay and what you save.