How to Calculate a Discount

Whether you are shopping for a new appliance or verifying a supplier's invoice, calculating discounts is a fundamental math skill. This guide covers the direct formula for finding a sale price, a faster mental shortcut, and how to work backward if you only know the final price.

Diagram showing that a 20% discount on $80 saves $16, resulting in a sale price of $64. — A 20% discount on $80 saves $16, resulting in a sale price of $64.

The Direct Formula

To find the sale price, you first calculate the amount you are saving (the discount amount) and subtract it from the original price.

Savings = Original Price × (Discount Percentage ÷ 100) Sale Price = Original Price - Savings

Worked Example: 20% off $80

Convert the percentage to a decimal: 20 ÷ 100 = 0.20
Multiply by the original price to find savings: $80 × 0.20 = $16
Subtract from the original price: $80 - $16 = $64

The "Keep-Factor" Shortcut

Instead of calculating the savings and subtracting, you can calculate the percentage of the price you keep (or pay). If an item is 20% off, you are paying 80% of the original price.

Sale Price = Original Price × (1 - (Discount Percentage ÷ 100))

Using the same $80 example:

1 - 0.20 = 0.80 (You pay 80%)
$80 × 0.80 = $64

This method is usually faster on a standard calculator.

Reverse Calculation: Finding the Original Price

If a store advertises a TV for $300 at 25% off, what was the original price? You cannot simply add 25% of $300 to $300. Instead, you must divide the sale price by the "keep" percentage.

Original Price = Sale Price ÷ (1 - (Discount Percentage ÷ 100))

Example: $300 ÷ (1 - 0.25) = $300 ÷ 0.75 = $400.

Common Mistakes

Adding instead of dividing for reverse math: As shown above, adding a percentage of the sale price does not recreate the original price.
Ignoring tax: Tax treatment of coupons, rebates, and products varies by jurisdiction. This calculator applies the rate you enter to the post-discount amount as a simple estimate.

Try the Calculator

Want to skip the manual math? Calculate sale prices, savings, and reverse percentages instantly with our Discount Calculator.