How to Calculate Discounts and Sale Prices: Complete Guide
Last updated: December 2024 • 8 min read
Sales, promotions, and discounts are everywhere. But do you really know how much you're saving? Understanding how to calculate discounts quickly and accurately helps you make smarter shopping decisions and spot truly great deals. This guide covers everything from basic discount calculations to complex scenarios like stacking multiple discounts.
Basic Discount Calculation
The fundamental formula for calculating a discounted price is straightforward:
Sale Price = Original Price × (1 - Discount Percentage ÷ 100)
Or alternatively:
Sale Price = Original Price - (Original Price × Discount Percentage ÷ 100)
Example: 25% Off a €80 Item
Method 1: €80 × (1 - 0.25) = €80 × 0.75 = €60
Method 2: €80 - (€80 × 0.25) = €80 - €20 = €60
You save: €20 (25% of €80)
Quick Mental Math Tricks
Common Discounts Made Easy:
- 10% off: Move the decimal point one place left. 10% of €85 = €8.50
- 20% off: Calculate 10%, then double it. 20% of €85 = €8.50 × 2 = €17
- 25% off: Divide by 4. 25% of €80 = €80 ÷ 4 = €20
- 50% off: Simply halve the price. 50% of €80 = €40
- 15% off: Calculate 10% + 5% (half of 10%). 15% of €80 = €8 + €4 = €12
- 33% off: Divide by 3. 33% of €90 ≈ €30
Finding the Original Price
Sometimes you know the sale price and discount, but need to find what the original price was:
Original Price = Sale Price ÷ (1 - Discount Percentage ÷ 100)
Example: An item is €60 after 25% off. What was the original price?
Original Price = €60 ÷ (1 - 0.25)
Original Price = €60 ÷ 0.75
Original Price = €80
Calculating the Discount Percentage
If you know both prices but not the discount percentage:
Discount % = ((Original - Sale) ÷ Original) × 100
Example: Original price €120, sale price €90
Discount % = ((€120 - €90) ÷ €120) × 100
Discount % = (€30 ÷ €120) × 100
Discount % = 25%
Stacking Multiple Discounts
When multiple discounts apply, you multiply them together — you don't add them!
Important: 20% off + 10% off ≠ 30% off!
Instead, each discount is applied to the already-reduced price.
Example: €100 item with 20% off, then additional 10% off
After 20% off: €100 × 0.80 = €80
After additional 10% off: €80 × 0.90 = €72
Total savings: €28 (28% total, not 30%)
Quick formula: €100 × 0.80 × 0.90 = €72
"Buy One Get One" Deals
BOGO deals can be tricky. Here's how to calculate the effective discount:
| Deal Type | Effective Discount | Example (€20 item) |
|---|---|---|
| Buy 1 Get 1 Free | 50% off (on 2 items) | Pay €20 for 2 = €10 each |
| Buy 1 Get 1 50% Off | 25% off (on 2 items) | Pay €30 for 2 = €15 each |
| Buy 2 Get 1 Free | 33% off (on 3 items) | Pay €40 for 3 = €13.33 each |
| 3 for €50 (normally €20 each) | 17% off | Pay €50 for 3 = €16.67 each |
Sales Tax on Discounted Items
Sales tax is typically calculated after the discount is applied:
Final Price = Discounted Price × (1 + Tax Rate ÷ 100)
Example: €80 item, 25% off, with 8% sales tax
Discounted price: €80 × 0.75 = €60
With tax: €60 × 1.08 = €64.80
Price Per Unit Comparison
To compare deals, calculate the price per unit:
Price Per Unit = Total Price ÷ Number of Units
Example: Which is a better deal?
- 6-pack for €8.99 → €8.99 ÷ 6 = €1.50 per unit
- 12-pack for €15.99 → €15.99 ÷ 12 = €1.33 per unit ← Better deal!
Calculate Your Discounts
Use our percentage calculator to quickly find discounts and sale prices.
Try Percentage Calculator →Frequently Asked Questions
Is 30% off twice the same as 60% off?
No! Two 30% discounts equal about 51% off total (1 - 0.7 × 0.7 = 0.51), not 60%.
Why do stores use prices like €9.99 instead of €10?
This is called "psychological pricing." €9.99 feels significantly cheaper than €10 even though the difference is just €0.01.
What's the difference between "% off" and "% of"?
"25% off €80" means you pay €60. "25% of €80" is just €20 (what you'd subtract for the discount).