Business Calculators
Work out discounted prices, the amount saved, and what a discount does to your margin — including stacked discounts and the reverse calculation.
Overview
This free discount calculator works out sale prices, savings and stacked discounts — and, if you enter your cost, what the discount actually does to your profit. It also runs backwards: give it two prices and it tells you what percentage came off.
The headline finding is that stacked discounts do not add up. Taking 20% and then another 10% is 28% off, not 30%, because the second discount applies to the price the first one left behind. The gap widens as the numbers grow: two 50% discounts leave a quarter of the price, not nothing.
The second finding matters more if you are the one offering the discount. Your cost does not fall when your price does, so a discount comes almost entirely out of profit. On an item carrying a 33% margin, a 10% discount removes 30% of the profit on that sale — which is why the margin figures appear beside the price rather than somewhere further down.
Nothing you type is uploaded. Prices, costs and margins are calculated in your browser and never transmitted, which matters when the numbers are your own rather than a shop's.
Step by step
The price before anything comes off. Tick the tax box if that figure already includes tax.
A percentage or a fixed amount. Stack as many as you need — each one applies to the price left by the one before.
Optional, and the most useful field on the page. It shows what the discount does to your margin and how much of the profit it removes.
Background
A percentage discount is a multiplication, not a subtraction. Twenty percent off means paying 0.8 of the price. That distinction has no consequence for a single discount and a large one as soon as there are two, because multiplying twice is not the same as adding the percentages and multiplying once.
Take 20% and then 10%. The first leaves 0.8 of the price, the second leaves 0.9 of what remains, and 0.8 × 0.9 is 0.72 — so the buyer pays 72% and the discount is 28%, not 30%. Two percent of the original price has quietly gone missing between the offer and the till.
The effect grows with the numbers. Two 50% discounts leave 0.5 × 0.5, which is a quarter of the price: 75% off rather than free. Three 30% discounts come to about 66% off rather than 90%. In every case the stacked result favours the seller, which is precisely why so much retail promotion is worded as 'an extra 10% off sale prices' rather than as a single larger figure.
Order does not matter when every discount is a percentage — multiplication commutes, so 20% then 10% is the same as 10% then 20%. It matters as soon as a fixed amount joins the chain. Take the percentage first and the fixed amount comes off a smaller number, which is worse for the buyer; take the fixed amount first and the percentage applies to a larger base, which is better. A seller stacking a percentage before a voucher and a buyer expecting the reverse will get different answers, and the difference is real money.
The other half of the picture is what the discount costs whoever gave it. Because cost is unchanged by a price cut, the entire reduction comes out of the margin. An item bought for 100 and sold for 150 carries 50 of profit; discount the price by 10% and it sells for 135, leaving 35. The price fell by a tenth and the profit fell by nearly a third. That ratio is why a discount that feels modest can make a product not worth selling.
Reference
Only two inputs are strictly needed and the third is the one that changes decisions. Most of the difficulty is in knowing which price you are starting from.
The original price
What the item cost before anything came off. In a stacked promotion this is the pre-sale price rather than the already-reduced ticket, and confusing the two is the fastest way to a wrong answer in either direction.
Required
The discount, or discounts
A percentage or a fixed amount, in the order they are applied. Order is irrelevant for two percentages and decisive as soon as a fixed amount is involved, so enter them the way they will actually be taken.
Required
Your cost
Optional and the most useful field here if you are the seller. Without it the tool can only tell you the new price; with it, it can tell you what fraction of the profit the discount consumed, which is the number that decides whether to offer it.
Optional
Whether the price includes tax
A percentage discount gives the same answer either way, since it scales both parts equally. A fixed amount does not — taken off a tax-inclusive price, part of it comes out of the tax rather than out of your revenue.
Optional
The tax rate
Used only to split net from gross, and only when the price includes tax. Removing tax is a division by one plus the rate, never a subtraction of the percentage — subtracting 20% from a gross figure understates the net every time.
Optional
Rounding
Real prices are rounded at each step, and stacked discounts round more than once. On small amounts the result can differ by a cent from a single combined calculation, which is normal and worth knowing before reconciling a till receipt.
Optional
What the discount is meant to achieve
Not part of the arithmetic and the thing that should decide it. Clearing stock, winning a first order and rewarding loyalty justify very different numbers, and a discount with no purpose is just a price cut.
Optional
The volume it has to bring
A discount pays for itself only if it sells enough extra. At a 33% margin a 10% discount needs roughly 43% more units to leave you where you were — a figure worth working out before agreeing to the offer, not after.
Optional
Who it helps
Sale tickets rarely show what you will actually pay once a further reduction applies at the till. Entering both discounts gives the real total and the real percentage, which is usually smaller than the signs imply.
Promotions are priced in percentages and paid for in margin. Seeing both at once is the difference between a campaign that grows profit and one that grows revenue while quietly shrinking what is left of it.
A goodwill reduction or a discount for a long engagement comes straight off the profit, since the hours cost the same either way. Knowing what fraction of the margin is going makes it a decision rather than a reflex.
It helps to know that a request for 'another 10%' after an agreed 20% is worth 8% of the original, not 10%. Both sides should be working from the same number, and only one of them usually is.
Trade terms are habitually expressed as stacked percentages — list less 30% less 5% — and the compound figure is what actually lands. Working it out precisely is the whole basis of the deal.
A single 25% and a stacked 20-plus-10 look similar and are not: the stack is 28% and the single is 25%. Comparing the final price rather than the advertised percentages is the only reliable method.
Do it properly
Advertised percentages combine in ways that are hard to do in your head, and stacked offers are always smaller than they sound. Working out what each option actually costs removes the guesswork in one step.
Enter your cost. A 10% discount on a 33% margin removes 30% of the profit, and a number like that changes whether the offer is worth making — but only if you see it before agreeing rather than after.
If you want to advertise 30% off, offer 30% off. Stacking 20% and 10% and calling it 30% is 28% in practice, and a customer who works it out has caught you being imprecise about your own prices.
Order changes the outcome once a fixed amount is involved. Applying the voucher first and then the percentage gives the buyer more, and being deliberate about it avoids an argument at the till.
A price cut only pays for itself through extra units. Calculate how many more you need before running the promotion — the number is usually larger than expected, and it is the test of whether the offer makes sense.
Tax you collect is not yours. Including it in the price side of a margin calculation flatters the result, and the flattery grows as the tax rate does.
Cutting 20% and later raising 20% leaves you 4% below where you started, and customers anchor on the lower price. Treat a discount as a decision about what the product is worth, not a temporary gesture.
Avoid these
Adding stacked percentages together
Multiply what remains instead. 20% then 10% leaves 0.8 × 0.9 = 0.72, so it is 28% off rather than 30%. The error always runs in the seller's favour, which is worth knowing whichever side of the counter you are on.
Expecting two 50% discounts to make something free
They leave a quarter of the price. The second half comes off what is left, not off the original, so the total is 75% off. The same logic caps any stack short of 100% however many discounts are applied.
Discounting without looking at the margin
Enter the cost. Because the cost does not move when the price does, a modest-looking discount takes a disproportionate share of the profit — and on a thin margin it can remove all of it while the sale still looks successful.
Applying a percentage to an already-discounted price by mistake
Be clear which price you are starting from. Working out 25% off a ticket that is already reduced gives a different answer from 25% off the original, and the difference is the whole reason stacked offers are worded the way they are.
Assuming a price rise reverses a price cut
It does not. Down 20% and up 20% leaves you 4% below the start, because the rise applies to the smaller number. Restoring a 20% discount takes a 25% increase, which is a much harder conversation.
Taking a fixed discount off a tax-inclusive price and counting it all as lost revenue
Part of it comes out of the tax. Split net from gross by dividing by one plus the rate before measuring the effect on margin, or the discount will look more expensive than it was.
Running a discount with no target for the extra volume
Work out how many more units it has to sell to break even, and check afterwards whether it did. A promotion that grew revenue and shrank profit is a common outcome and an entirely measurable one.
FAQ
The Discount Calculator is at the top of this page — free, no signup, nothing uploaded.
Guides
Articles that go deeper than this page has room for.