A discount is a percentage decrease applied to a price, and the arithmetic is straightforward: a 30% discount leaves you paying 70%, so multiply the price by 0.7. What makes discounts worth their own page is not the single-discount case but everything that gets layered on top of it — stacked offers, “up to” claims, discounts interacting with tax, and the gap between the saving advertised and the saving realised.
Work out both numbers whenever you can: the price you pay and the amount you save. The first tells you whether you can afford it; the second tells you whether the deal is actually good. Retail pricing is designed so that the more attractive of the two is the one on the sign.
When you need this
Checking a sale price at the till. The most common use, and the one where a quick sanity check catches genuine errors surprisingly often.
Deciding between competing offers. “$40 off” versus “25% off” are the same thing at $160 and very different either side of it. Converting both to a final price is the only reliable comparison.
Setting a discount as a seller. Knowing what a 30% discount does to your margin is essential before you advertise it — a 30% discount on a product with a 40% margin does not leave you with 10%, it leaves you with very little. The profit margin calculator is the other half of that decision.
Worked examples
$150 with 30% off. The factor is 0.7, so 150 × 0.7 = $105, and the saving is $45.
$89.99 with 15% off. 89.99 × 0.85 = $76.49, saving $13.50.
Stacked discounts: 30% off, then a further 20% off. This is not 50% off. Multiply the factors: 0.7 × 0.8 = 0.56, so you pay 56% of the original and the true discount is 44%. On a $200 item you pay $112 rather than the $100 that “50% off” would give — a $12 difference, and one the wording is designed not to draw attention to. Our guide on how stacked discounts work covers the variations, including why the order of two stacked discounts never changes the result.
A discount plus a coupon on top. “20% off” plus “extra 10% for members” behaves the same way: 0.8 × 0.9 = 0.72, so 28% off in total.
Where people go wrong
Adding stacked percentages. By far the most common error, and it always overstates the saving. Multiply the remaining factors instead.
Reading “up to 70% off” as a rate. It is a ceiling, and typically applies to a small number of lines. The only figure that means anything is the one on the item you are holding.
Comparing a discount to an inflated reference price. A discount is only as real as the price it is taken from. Many jurisdictions regulate how long a “was” price must have been genuinely charged for, precisely because this is so easy to game.
Assuming tax comes off too. In most systems the discount applies to the pre-tax price and tax is then charged on the reduced amount, so your tax falls proportionally. But the treatment varies by jurisdiction and by the kind of charge, and for a business the distinction affects what you can reclaim. See the sales tax calculator for that side.
Confusing discount with margin. Taking 30% off a price does not reduce your margin by 30 percentage points — it reduces it by considerably more, because the cost stays where it was while the revenue falls. This is the mistake that quietly turns a promotion into a loss.
Working backwards
If you know the sale price and the discount rate and want the original, divide rather than add the percentage back: $105 after 30% off means 105 ÷ 0.7 = $150. That is the reverse percentage calculator, and it is the calculation to reach for whenever you are checking whether an advertised “was” price is consistent with the discount being claimed.