How do you calculate a discount?

Multiply the original price by the discount percentage expressed as a decimal. Subtract that discount amount from the original price to get the sale price.

How do I calculate 20% off a price?

Multiply the original price by 0.20 to find the discount, then subtract it. For a $150 item, the discount is $30 and the sale price is $120.

How do I find the discount percentage from two prices?

Subtract the sale price from the original price, divide the difference by the original price, then multiply by 100.

Are two 20% discounts the same as 40% off?

No. Sequential discounts apply to different price bases. Two 20% discounts produce a combined reduction of 36%, not 40%.

Should sales tax be calculated before or after a discount?

The taxable base depends on local tax rules and the type of discount. For a real transaction, confirm the rules that apply in the relevant jurisdiction.

How to Calculate a Discount

Discount calculations help shoppers compare offers and help businesses plan promotions without guessing. This guide shows how to calculate the discount amount, sale price, discount percentage, and sequential discounts, with practical examples and common mistakes to avoid.

Last reviewed: 2026-09-10

Discount formula

To calculate a percentage discount, convert the percentage to a decimal and multiply it by the original price. Then subtract the discount amount from the original price.

Discount Amount = Original Price × Discount Rate
Sale Price = Original Price − Discount Amount

You can calculate both instantly with the Discount Calculator.

Example: calculate 20% off $150

Suppose an item normally costs $150 and is advertised at 20% off. Convert 20% to 0.20 and multiply it by the original price.

Discount Amount = $150 × 0.20 = $30
Sale Price = $150 − $30 = $120

The customer saves $30 and pays $120 before any applicable taxes, shipping, or other charges.

How to calculate the sale price directly

You can skip the separate discount-amount step by multiplying the original price by the percentage that remains after the discount.

Sale Price = Original Price × (1 − Discount Rate)
$150 × (1 − 0.20) = $150 × 0.80 = $120

This shortcut is useful when comparing several discounted prices. For general percentage calculations, use the Percentage Calculator.

How to find the discount percentage

If you know the original price and sale price but not the advertised percentage, first calculate the amount saved and divide it by the original price.

Discount % = ((Original Price − Sale Price) ÷ Original Price) × 100
($200 − $150) ÷ $200 × 100 = 25%

A product reduced from $200 to $150 is therefore discounted by 25%.

How sequential discounts work

Two discounts should not normally be added together because the second discount is applied to the already-reduced price. For example, consider two consecutive 20% discounts on a $100 item.

After first 20% discount: $100 × 0.80 = $80
After second 20% discount: $80 × 0.80 = $64
Total reduction: $100 − $64 = $36 = 36%

Two 20% discounts produce a final price of $64, equivalent to 36% off the original price—not 40%.

Discount plus sales tax

A discount and a tax are separate percentage operations. If local rules require tax to be applied to the discounted selling price, calculate the eligible discount first and then apply the tax rate to the taxable amount. Tax treatment can vary by jurisdiction and by discount type, so verify the applicable rule for real transactions.

For the tax calculation itself, use the Sales Tax Calculator or see our sales tax calculation guide.

Discount vs markup

A discount reduces a reference selling price, while markup increases cost to establish a selling price. They use different bases. A 25% markup followed by a 25% discount does not return a product to its original cost because the percentages are applied to different amounts.

Businesses planning promotions should evaluate the resulting selling price against product cost and required margin rather than focusing only on the headline discount percentage.

Common discount calculation mistakes

Using the sale price as the base. A stated percentage-off discount is normally calculated from the original or eligible reference price.
Adding sequential discounts. Consecutive percentage reductions compound instead of simply adding together.
Confusing percentage off with percentage remaining. A 30% discount means the customer pays 70% of the original price.
Ignoring fees and taxes. The discounted merchandise price may not equal the final amount paid.
Comparing percentages without comparing base prices. A larger percentage discount can still produce a higher final price if the original price is higher.

How to compare discount offers

Convert each offer to a final comparable price. Include eligible coupon rules, sequential discounts, quantity requirements, and any charges that materially affect what you pay. For business promotions, also calculate the post-discount gross profit or margin so a promotion can be evaluated on economics as well as customer appeal.