How to Calculate a Discount: Percent Off, Stacked Deals & Fake Sales
A big red "50% OFF" sign is exciting, but the number that actually matters is what you pay at the till. Working out a discount in your head is a genuinely useful skill; it helps you compare deals, budget on the spot, and spot when a "sale" is not really a saving at all. This guide covers the simple formula, worked examples, how to reverse it, and two things shops would rather you did not know.
The basic discount formula
Calculating a sale price is a two-step process. First find the saving, then subtract it:
Saving = original price × discount % ÷ 100
Sale price = original price − saving
For example, a $120 jacket at 30% off: the saving is 120 × 30 ÷ 100 = $36, so the sale price is 120 − 36 = $84. There is an even quicker one-step version: multiply by (1 minus the discount as a decimal). For 30% off, multiply by 0.70, so 120 × 0.70 = $84. Both give the same answer; the one-step method is faster once you are comfortable with it.
The 10% mental shortcut
You can estimate most discounts without a calculator. Find 10% by moving the decimal one place left, then scale it. On an $80 item, 10% is $8. So a 30% discount is three lots of that, $24 off, leaving $56. A 20% discount is $16 off. This trick makes in-store maths quick and keeps you from overpaying on impulse.
Working backwards to the original price
Sometimes you see a sale price and want to know the original, perhaps to check whether a deal is genuine. Here the common mistake is to add the discount percentage back on, which gives the wrong answer. Instead, divide the sale price by (1 minus the discount as a decimal).
Example: an item is $150 after 25% off. Original = 150 ÷ (1 − 0.25) = 150 ÷ 0.75 = $200.
Finding the discount percentage
If you know the original and sale prices, you can work out the percentage off. Subtract the sale price from the original, divide by the original, and multiply by 100. For a shirt marked down from $17 to $13: (17 − 13) ÷ 17 × 100 = about 23.5% off. This is handy for comparing two deals with different starting prices.
Why stacked discounts do not add up
This is the big one that catches almost everyone. When a shop offers "20% off, then an extra 10% off," it is not 30% off. The second discount applies to the already-reduced price, not the original.
On a $100 item: 20% off gives $80. Then 10% off the $80 gives $72. You paid $72, so the effective discount is 28%, not 30%.
Two stacked 25% discounts are not 50% off either, they come to 43.75% off.
The stacked total is always less than adding the percentages together. Knowing this stops you from overestimating a deal and helps you compare a single big discount against two smaller ones.
Spotting fake discounts
Not every sale is a saving. A common trick is fictitious pricing, where the "original" price is inflated so the "sale" price looks like a bargain, when it is really just the normal price. Another is the permanent sale, where an item is listed as "on sale" indefinitely. To protect yourself: check whether the item was actually sold at the higher price recently, compare it against other retailers, and do the discount maths yourself. If the numbers do not match the advertised percentage, be sceptical. Many countries have consumer laws requiring that a reference price be one the item was genuinely sold at.
Do not forget tax
One practical detail: in most places, sales tax or VAT is calculated on the discounted price, not the original. So on a $300 item at 20% off, tax applies to $240, not $300. This means your final checkout total is the sale price plus tax on that reduced amount.
Let the calculator do the maths
When you would rather not work it out by hand, our free Discount Calculator gives you the sale price and your savings instantly, just enter the original price and the discount percentage. For the wider maths behind it, see our guide on how to calculate percentages, since a discount is really just a percentage decrease.
- Omni Calculator and Calculator.net — discount and percent-off formulas
- Study.com and Cuemath — worked discount examples
- Consumer protection guidance on reference pricing and fake discounts
Frequently asked questions
- How do I calculate a discount?
- Multiply the price by the discount percent and divide by 100 for the saving, then subtract it. 30% off $120 saves $36, giving $84.
- Is 20% off then 10% off the same as 30% off?
- No. The second discount applies to the reduced price, so the effective total is about 28%, not 30%.
- How do I find the original price?
- Divide the sale price by (1 minus the discount as a decimal). A $150 item at 25% off was originally $200.
- Is tax charged before or after the discount?
- In most places, tax is charged on the discounted price, not the original.