How discounts really work
A single discount is simple: the sale price is the original price times one minus the discount. It’s the second discount — the “extra % off the sale price” coupon — that trips people up, and it’s where most online calculators stop. The two discounts don’t add; they multiply, because the second one is taken off an already-reduced price. Add sales tax, and the number you actually hand over at the register can be far from the headline percentage.
The stacked-discount formula
effective = 1 − (1 − d1)(1 − d2)
where d₁ and d₂ are the two discounts as decimals. For 50% then an extra 20%: 1 − (1 − 0.50)(1 − 0.20) = 1 − 0.40 =60% off, not the 70% you’d get by adding them. The final price then has sales tax applied to whatever’s left.
What makes this calculator different
- Stacked discounts done right. Enter a second “extra % off the sale price” and we multiply, not add — and show the true effective discount next to the figure people wrongly assume.
- The real out-the-door price. Sales tax is applied to the discounted price so you see exactly what you’ll pay at the register.
- A clear breakdown. A line-by-line path from list price to final price shows where every dollar of savings comes from.
- Shareable. Every deal lives in the URL, so you can send a comparison to a friend or save it for later.
Frequently asked questions
How do I calculate a discount?+
Multiply the original price by the discount as a decimal to get the amount off, then subtract it from the price. For a 25% discount on an $80 item: $80 × 0.25 = $20 off, so the sale price is $80 − $20 = $60. A faster shortcut is to multiply the price by (1 − discount), e.g. $80 × 0.75 = $60. This calculator does it instantly and also adds the parts most people forget — stacked discounts and sales tax.
Why don’t stacked discounts add up?+
Because the second discount applies to the already-reduced price, not the original. “50% off, then an extra 20% off the sale price” is not 70% off. After the first cut you’re at 50% of the price; taking 20% off that leaves 80% of 50%, which is 40% of the original — a 60% effective discount. In general, two discounts of a% and b% combine to 1 − (1 − a)(1 − b), which is always less than a + b. Store signage often blurs this, so the “true” effective discount this calculator shows is the number that matters.
What’s the difference between “percent off” and “amount off”?+
A percent-off discount scales with the price — 20% off saves more on an expensive item than a cheap one. An amount-off (dollar) discount is a fixed reduction regardless of price, so it’s a bigger percentage on a cheaper item. To compare them, convert the dollar amount to a percent: a $15 coupon on a $60 item is 25% off, which beats a flat 20%-off sale. Enter the price to see the effective percent for any deal.
Does sales tax apply before or after the discount?+
In almost all US jurisdictions, sales tax is charged on the final, discounted price — you pay tax on what you actually spend, not the original list price. So the order is: apply the discount(s) first, then add tax to the sale price. (Manufacturer rebates can be an exception in some states, where tax is computed before the rebate.) This calculator taxes the discounted price to give you the real out-the-door total.
Is the bigger percentage always the better deal?+
Not necessarily. A bigger percent off a higher starting price can leave you paying more than a smaller percent off a lower price, and stacked or coupon deals can beat a single large markdown. What matters is the final price you pay — and, if you’re comparing across stores, the out-the-door total including tax. Compute the effective discount and final price for each option rather than trusting the headline percentage.
Disclaimer: This calculator is for educational purposes only. Sales-tax rules and how discounts, coupons, and rebates are applied vary by retailer and jurisdiction. It is not financial advice.