How to Calculate Percent Off: Sale Price, Savings and Stacked Discounts
A "30% off" tag is simple on a round number and surprisingly easy to get wrong on everything else. This guide shows the one formula behind every discount, how to work backwards from a sale price, why two stacked discounts never add up the way they look, and how to compare "$ off" deals with "% off" deals.
The formula for percent off
Every percent-off calculation comes down to two lines:
Example: a jacket costs $80 and is 25% off. Savings = 80 × 0.25 = $20, so the sale price is 80 − 20 = $60. The shortcut is to multiply by the share you still pay: 80 × 0.75 = $60.
Working backwards: finding the original price
If you only see the sale price and the discount, divide by the share that is left after the discount:
A $60 item marked 25% off had an original price of 60 ÷ 0.75 = $80. A common mistake is to add 25% to $60 (which gives $75). That is wrong because the discount was taken from the original price, not from the sale price.
Stacked discounts: why 20% + 10% is not 30%
When a store takes 20% off and then an extra 10% off, the second discount applies to the already-reduced price. The combined discount is:
On a $100 item: 100 × 0.80 = $80, then 80 × 0.90 = $72. You save $28, not $30. The order does not change the final price, because multiplication gives the same result either way, but the extra percentage is always worth a little less than its face value.
Discount first, tax second
In most places, sales tax is charged on the discounted price. With a $60 sale price and 8% sales tax, the tax is 60 × 0.08 = $4.80, so you pay $64.80. If you want to estimate the final total, calculate the discount first and apply tax to the result. Tax rates vary by location, so use your local rate.
"$50 off" or "30% off": which is better?
The two deals are equal when 30% of the price equals $50, which happens at 50 ÷ 0.30 = about $166.67. Below that price, the flat $50 off is the bigger saving; above it, 30% off wins. For example, on a $100 item $50 off saves half the price, while 30% off saves only $30.
Common mistakes to avoid
- Adding percentages. Two stacked discounts combine by multiplication, as shown above.
- Reversing a discount by adding it back. Divide the sale price by (1 − discount) instead.
- Mixing up percent and percentage points. Going from a 20% discount to a 30% discount is 10 percentage points more, but it cuts the price you pay from 80% to 70% of the original, a drop of 12.5% in what you pay.
- Reading "up to 50% off" as 50% off everything. It usually describes the best deal in the range, not the typical one.
For other kinds of percentage problems, such as percentage change and percentage of a number, see How Percentages Work.