Sales are designed to feel like a bigger deal than they are. Knowing the math takes ten seconds and helps you spot when “70% off” is a real bargain and when two smaller discounts add up to less than they sound.
The short version
- Sale price = original × (1 − discount). $80 at 25% off = $60.
- Stacked discounts multiply: 20% off then 10% off is 28% off, not 30%.
- “Buy one, get one 50% off” is 25% off both items.
- Original price = sale price ÷ (1 − discount).
The basic discount
Turn the percentage into a decimal and subtract it from 1. 25% off means you pay 0.75 of the price: $80 × 0.75 = $60. The savings are $80 × 0.25 = $20.
Mental shortcut: find 10% by moving the decimal one place (10% of $80 is $8), then multiply. 30% off is 3 × $8 = $24 off.
Stacked discounts
When a store offers “an extra 20% off sale prices”, the second discount applies to the already-reduced price. Multiply the remaining fractions: (1 − 0.30) × (1 − 0.20) = 0.70 × 0.80 = 0.56. You pay 56% of the original, which is 44% off, not 50%.
Example
A $150 jacket is 30% off, with an extra 20% off at checkout. $150 × 0.70 = $105, then $105 × 0.80 = $84. You save $66, or 44%.
Buy-one-get-one deals
| Deal | What you pay for two $20 items | Real discount |
|---|---|---|
| Buy one, get one free | $20 | 50% off both |
| Buy one, get one 50% off | $30 | 25% off both |
| Buy two, get one free (three items) | $40 for $60 of items | 33% off all three |
These deals only save money if you wanted the second item anyway.
Dollars off vs. percent off
Which is better, $15 off or 20% off? Find the price where they are equal: $15 ÷ 0.20 = $75. Below $75, the $15 coupon saves more; above $75, 20% wins.
Working back to the original price
If a tag says $42 after 40% off, the original was $42 ÷ 0.60 = $70. Don’t add 40% back on: $42 × 1.40 = $58.80, which is wrong.
Sales tax on a discounted item
Store discounts generally reduce the price that sales tax is charged on, so you pay tax on the sale price. Manufacturer coupons can be treated differently depending on the state. See how to calculate sales tax.
Example: discount plus tax
Gabriela in Houston buys a $250 vacuum at 20% off, so $200. With Texas’s 6.25% state tax plus her city’s local tax for a combined 8.25%, the total is $200 × 1.0825 = $216.50.
Is it really a deal?
- Check the price history if the store or an app shows one. Some “original” prices were never charged for long.
- Compare the final price with other stores, not the size of the discount.
- Factor in shipping and return costs.
- Ask whether you’d buy it at this price without the sale sign.
Our discount calculator handles single and stacked discounts, and our percentage calculator covers the rest. More percentage tricks are in how to calculate a percentage.
Discount math in your head
- 25% off: divide by 4 to get the discount. $72 → $18 off → $54.
- 50% off: halve it.
- 33% off: about a third. $90 → about $30 off → about $60.
- 15% off: 10% plus half of 10%. $60 → $6 + $3 = $9 off → $51.
Percent saved from a sale tag
If a tag shows “was $64.99, now $45.49”, the saving is $19.50. Divide by the original: 19.50 ÷ 64.99 × 100 ≈ 30% off. Doing this quickly helps you compare a “$20 off” deal with a “25% off” deal on the spot.
Membership and subscription “discounts”
Some discounts require a paid membership. A store membership that costs $60 a year and saves 5% only pays for itself if you spend more than $1,200 a year there ($60 ÷ 0.05). Run that check before signing up, and see how to cancel subscriptions for the ones you don’t use.
