How to Calculate a Discount
Last updated 2026-09-11
Working out a sale price is simple once you know the formula — and knowing how stacked discounts actually combine can save you from overestimating your savings.
Calculate the discount amount
Multiply the original price by the discount rate, divided by 100. A $120 item at 30% off: discount = (120 × 30) ÷ 100 = $36.
Subtract from the original price
Sale price = Original price − Discount amount. $120 − $36 = $84.
Example
A $120 item at 30% off costs $84, saving $36.
Important Considerations
- Stacked discounts are not additive. A 30% discount followed by a 20% discount on the reduced price is not a 50% total discount — it's 44%: 100 × (1 − 0.30) × (1 − 0.20) = 56, meaning you pay 56% of the original price.
- Some retailers apply discounts to the pre-tax price, others to the post-tax total — check which applies for exact numbers.
Frequently Asked Questions
- Do two discounts of 30% and 20% equal 50% off?
- No. Applying them in sequence gives a 44% total discount, not 50%, because the second discount is calculated on the already-reduced price.
- How do I add tax after a discount?
- Apply the discount first to get the sale price, then apply tax to that reduced amount, unless your local rules specify otherwise.
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