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).
Stacked Discounts: When 20% + 10% Does NOT Equal 30% Off
A common mistake when multiple discounts are applied in sequence is adding the percentages together. This is incorrect — each discount applies to the already-reduced price, not the original.
Example: A coat originally priced at £200 has two promotions: first a 20% seasonal sale, then an additional 10% loyalty discount.
- After 20% off: £200 × 0.80 = £160
- After further 10% off: £160 × 0.90 = £144
- Total saving: £56 (28% off — not 30%)
The formula for stacked discounts: Final price = Original × (1 − d₁) × (1 − d₂) × ...
A 20% + 10% stack always gives 28% total. A 30% + 20% stack gives 44% total, not 50%.
Black Friday Maths: Spotting Fake Discounts
Research consistently shows that many "Black Friday deals" inflate the original price in the weeks before to make the discount look larger. Here's how to spot and verify real discounts.
Check the Price History
Use browser extensions like Keepa (for Amazon) or CamelCamelCamel to view historical prices. A product listed at "£120, was £200" may have been £120 for the past 11 months and briefly listed at £200 just before Black Friday.
The Savings Sanity Check
Always verify: Claimed discount % = (Original − Sale) ÷ Original × 100
If a TV is "£399, was £699," that implies a £300 saving: £300 ÷ £699 × 100 = 42.9% off. If the retailer claims "50% off," the claimed original price should be £798 — so check which figure they're using.
Quick-Reference Discount Table
How much do you actually pay after each discount level? Here's a complete reference for a £100 original price:
| Discount | You Save | You Pay | Multiplier |
|---|---|---|---|
| 5% off | £5.00 | £95.00 | × 0.95 |
| 10% off | £10.00 | £90.00 | × 0.90 |
| 15% off | £15.00 | £85.00 | × 0.85 |
| 20% off | £20.00 | £80.00 | × 0.80 |
| 25% off | £25.00 | £75.00 | × 0.75 |
| 30% off | £30.00 | £70.00 | × 0.70 |
| 40% off | £40.00 | £60.00 | × 0.60 |
| 50% off | £50.00 | £50.00 | × 0.50 |
| 70% off | £70.00 | £30.00 | × 0.30 |
Alex van den Berg
Financial Educator & Mathematics Writer
Alex has 8+ years of experience in personal finance education and mathematics instruction. He writes practical guides on financial calculations, everyday maths, and how to use digital tools to make smarter money decisions.