Discount Calculator

The discount calculator applies up to three sequential formulas. First, the savings amount is calculated by multiplying the original price by the discount rate expressed as a decimal: Savings = Original Price × (Discount% ÷ 100). For a $120 item at 25% off: $120 × 0.25 = $30.00 saved. Second, the sale price before tax is found by subtracting savings from the original: Sale Price = Original Price − Savings, giving $120 − $30 = $90.00. Third, if a sales tax rate is provided, the tax is calculated on the discounted price — not the original — since sales tax is assessed on the actual transaction amount at the point of sale: Tax Amount = Sale Price × (Tax Rate ÷ 100). The final price is then: Final Price = Sale Price + Tax Amount. This order of operations is important. In all US retail transactions, discounts are applied first and tax is computed on the reduced amount. Applying tax before the discount would overstate the true cost. A practical extension of this calculation is understanding stacked discounts: two successive discounts of 20% and 10% are not equivalent to a single 30% discount. Instead, you pay 80% of the original after the first discount, then 90% of that, resulting in 0.80 × 0.90 = 0.72, meaning you pay 72% — a 28% total reduction, not 30%. This calculator handles single percentage discounts with optional sales tax.