Discount Percentage Calculator — Original vs Sale Price

Stacked discounts do not add

A 20% discount followed by another 20% is not 40% off. The second applies to the already-reduced price, so 0.8 × 0.8 = 0.64 — a 36% total discount. The pattern holds generally: multiply the remainders rather than adding the discounts.

Order makes no difference to the final price — 30-then-20 gives exactly the same result as 20-then-30, since multiplication commutes. That surprises people who assume applying the larger discount first is worth something.

The same arithmetic produces a trap in reverse: a 50% increase followed by a 50% decrease does not return you to the start. 1.5 × 0.5 = 0.75, leaving you 25% below where you began.

A discount comes entirely out of profit

This is the seller-side half, and it is the more valuable one. When you discount, your cost of goods does not move — so the whole discount is taken from margin.

The rule is simple: the share of unit profit a discount consumes is the discount divided by the margin. A 10% discount on a 40% margin product costs 10 ÷ 40, a quarter of the profit on that unit.

Read the bottom row carefully. On a 10% margin product, a routine 10% promotional discount does not reduce the profit — it removes it entirely, and anything deeper sells at a loss. Use the gross margin calculator to establish the margin figure this depends on.

The volume you would need to stand still

If a discount leaves you with a fraction of the unit profit, you need proportionally more units to earn the same total. The multiplier is:

volume needed = 1 ÷ (1 − discount ÷ margin)

On a 40% margin, a 10% discount leaves 75% of unit profit, so you need 1 ÷ 0.75 — about 33% more volume. On a 20% margin the same 10% discount leaves half the profit, so you need 1 ÷ 0.5, which is double the volume. And that is before the extra cost of serving those additional customers.

This is why blanket discounting is manageable for high-margin businesses and quietly fatal for low-margin ones: the required volume lift rises steeply as margin falls, and most cost structures do not scale that way.

What this tool does

It takes an original price and a sale price, and returns the amount saved and the discount percentage. That covers verifying the maths on a pricing page, or working backwards from a target price to the percentage you would advertise.

It does not model stacking, margin impact or break-even volume — those you work through with the formulas above, which is why they are set out here rather than assumed. General business information, not financial advice.