BizFormula

Pricing & Profit

Discount Calculator

Calculate the final sale price and the amount saved from an original price and a percentage discount.

Enter the original price and the discount percentage. Sales tax is optional.

Enter your values

The price before any discount is applied.

$

Percentage taken off the original price.

%

Optional. Applied to the discounted price, not the original price.

%

Results

Final price

—

Enter an original price and a discount percentage.

You save

—

The amount taken off the original price.

Discount applied

—

The percentage entered.

Results are estimates based on the values entered and are provided for general planning.

Method

How to calculate discount

A percentage discount is the original price multiplied by the discount rate. Subtracting that amount from the original price leaves the sale price. If sales tax applies, it is normally charged on the discounted amount actually paid, so tax is calculated after the discount rather than before it.

Formula

Discount amount = Original price × Discount % ÷ 100
Final price = Original price − Discount amount
With tax: Tax = Final price × Tax % ÷ 100, then add it back

Assumptions

  • One percentage discount applies to the full original price.
  • Sales tax, when entered, is applied to the discounted price rather than the original price.
  • No tax rates are looked up automatically — the rate entered is the rate used.
  • Stacked or sequential discounts are not modelled here.

Savings, tax, and the final price are calculated at full precision before display. Currency displays two decimals; percentages display two decimals.

How to interpret the result

The final price is what a buyer pays under the discount entered. The savings figure is the seller's revenue reduction, not a cost saving: the cost of the item does not fall when the price does. Before approving a discount, compare the final price with your unit cost to confirm the sale still leaves an acceptable margin.

Discounting and margin

A discount reduces the price but not the cost of goods. An item costing $60 sold at $120 carries a 50% margin; discounted 25% to $90 the margin falls to 33.3%, and gross profit per sale drops from $60 to $30.

That means volume has to rise substantially for a discount to be profit-neutral. Halving margin requires doubling units sold simply to hold gross profit steady.

Frequently asked questions

Multiply the original price by the discount percentage divided by 100 to get the savings, then subtract that amount from the original price. A 25% discount on $120 is $30 off, giving $90.

Yes. Sales tax is optional. When you enter a rate, tax is applied to the discounted price and added to produce the final amount paid.

A final price of $0. That is a valid entry, and the savings equal the original price.

Not in one step. Apply the first discount, then run the result through again for the second. Two 20% discounts equal a 36% total reduction, not 40%.

No. The saving reduces revenue by the full discount amount, but profit falls only by the share of that revenue you would have kept after cost.

Keep calculating

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Before committing to a discount, use the selling price calculator to see what price a target margin requires, and the profit margin calculator to check what the discounted price leaves behind.

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