About the discount calculation
A single discount is straightforward arithmetic. Stacked discounts are where retailers and shoppers diverge: "20% off, then a further 20% off" is not 40% off — it is 36%, because the second reduction applies to the already-reduced price.
Formula
Saving = Price × (percent ÷ 100)
You pay = Price − Saving = Price × (1 − percent/100)
Stacked: Price × (1 − a/100) × (1 − b/100)Worked example
25% off 2,000: the saving is 500 and you pay 1,500. Apply another 25% and you pay 1,125 — a total of 43.75% off, not 50%.
Frequently asked questions
Why do stacked discounts total less than the sum?
Because each successive discount applies to a smaller base. Two 20% discounts multiply out to 0.8 × 0.8 = 0.64, which is 36% off in total. The gap grows as the discounts get larger.
Is a discount applied before or after tax?
Almost always before. The discount reduces the taxable price, and tax is then charged on the reduced amount. Use our GST calculator to add tax back onto the discounted figure.
How do I work out the percentage off from two prices?
Divide the saving by the original price and multiply by 100. Going from 2,000 to 1,500 saves 500, which is 25% off. Our percentage change calculator does this directly.
Sources
- Standard percentage discount arithmetic