Discount calculator: percent off, reverse discounts and sales tax

To calculate percent off, multiply the original price by the discount percentage divided by 100, then subtract that amount from the original price. The formula is: sale price = original price x (1 - discount / 100). For an $80 jacket at 25% off, the savings are $80 x 0.25 = $20, so you pay $60. To go the other way and find the discount rate from two prices, divide the savings by the original price: ($120 - $90) / $120 = 0.25, a 25% discount. The calculator above handles both directions, plus sales tax, as you type.

Quick mental math for discounts

• Use the 10% trick. Move the decimal one place left to get 10% of any price: 10% of $74 is $7.40. From there, 5% is half of that ($3.70), 20% is double ($14.80), and 30% is triple ($22.20). You can estimate almost any discount in your head by combining them.
• Stacked discounts multiply, they do not add. A 20% discount followed by an extra 10% off is not 30% off. The second discount applies to the already reduced price: $100 x 0.80 = $80, then $80 x 0.90 = $72. That is a 28% total discount, not 30%. Retailers count on shoppers adding instead of multiplying.

For business owners: discounting without killing margin

A discount comes straight out of your margin, not your revenue, which is why small discounts hurt more than they look. Standard pricing math: the extra unit volume you need to earn the same gross profit is roughly the discount divided by your margin minus the discount. On a product with a 30% gross margin, a 10% discount leaves 20 points of margin, so you need about 50% more sales volume just to break even on the promotion. These figures are approximate and assume your costs per unit stay flat, but the direction is always the same: the thinner your margin, the more dangerous the discount. Before you run a sale, check your real margin with our margin and markup calculator and find the volume you need with the break-even calculator.

Discounts move inventory, but they cannot fix a store nobody finds. If you want more customers arriving at full price, request a free SEO audit and see what is keeping buyers from finding you on Google.