Authoritative Source & Methodology

This calculator uses the fundamental principles of percentage and decimal arithmetic, which are standard mathematical axioms. The methodology is consistent with standard retail and financial practices for calculating price discounts and sales tax.

All calculations are based strictly on the established formulas presented below.

The Formulas Explained

The calculation is performed in a specific order to ensure accuracy, especially when sales tax is included.

1. Calculate Savings Amount

First, the discount percentage is converted to a decimal and multiplied by the original price.

$$ \text{Savings Amount} = \text{Original Price} \times \left( \frac{\text{Discount \%}}{100} \right) $$

2. Calculate Discounted Price (Subtotal)

The savings amount is subtracted from the original price to find the new subtotal.

$$ \text{Discounted Price} = \text{Original Price} - \text{Savings Amount} $$

3. Calculate Sales Tax (If Applicable)

Sales tax is calculated based on the discounted price, not the original price.

$$ \text{Tax Amount} = \text{Discounted Price} \times \left( \frac{\text{Sales Tax \%}}{100} \right) $$

4. Calculate Final Price

The tax amount is added to the discounted price to get the total amount due.

$$ \text{Final Price} = \text{Discounted Price} + \text{Tax Amount} $$

Glossary of Variables

Original Price
The full, non-discounted price of the item. This is the starting value for all calculations.
Discount (%)
The percentage of the original price that will be subtracted as a discount (e.g., 20% off).
Sales Tax (%)
An optional percentage added *after* the discount is applied, based on local tax laws.
Final Price
The total amount you will pay, including the discount and any sales tax.
You Save
The total dollar amount subtracted from the original price (this does not include tax).

How It Works: A Step-by-Step Example

Let's say you want to buy a jacket with an original price of $150.00. The store is offering a 25% discount, and your local sales tax is 8%.

  1. Calculate Savings:

    $$ \text{\$150.00} \times \left( \frac{25}{100} \right) = \$37.50 $$

  2. Calculate Discounted Price:

    $$ \text{\$150.00} - \$37.50 = \$112.50 $$

  3. Calculate Tax on Discounted Price:

    $$ \text{\$112.50} \times \left( \frac{8}{100} \right) = \$9.00 $$

  4. Calculate Final Price:

    $$ \text{\$112.50} + \$9.00 = \mathbf{\$121.50} $$

You would pay $121.50 for the jacket and your total savings from the discount would be $37.50.

Frequently Asked Questions (FAQ)

How do I calculate a discount of 20% off?

To calculate a 20% discount, multiply the original price by 0.20 to find the savings amount. Then, subtract that savings amount from the original price to get the final price. For example, for a $50 item: $50 * 0.20 = $10 savings. $50 - $10 = $40 final price.

How do I calculate a double discount (e.g., 20% + 10%)?

A double discount is not the same as a single combined discount (i.e., 20% + 10% is not 30% off). You must apply them sequentially. First, apply the 20% discount to the original price. Then, apply the 10% discount to that new, discounted price.

Is the discount applied before or after sales tax?

In virtually all retail scenarios, the discount is applied before sales tax. The sales tax is calculated on the new, lower (discounted) price. This calculator follows that standard methodology.

How do I calculate a fixed amount discount (e.g., $10 off)?

A fixed amount discount is simpler. Just subtract the fixed amount from the original price. For example, $75 - $10 off = $65. If you need to find the percentage this represents, divide the savings ($10) by the original price ($75) and multiply by 100.

How do I find the original price if I know the final price and the discount?

You can find the original price using the formula: Original Price = Final Price / (1 - (Discount % / 100)). For example, if you paid $80 for an item that was 20% off: $80 / (1 - (20 / 100)) = $80 / (1 - 0.20) = $80 / 0.80 = $100. The original price was $100. (This formula assumes no sales tax).

Tool developed by Ugo Candido.
Content verified by the CalcDomain Editorial Board.

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