Discount Calculator

How to Calculate Discount

A discount is a reduction in the original price of a product or service. Discounts are expressed as a percentage of the original (marked) price. There are three common discount calculations:

Discount Formulas

Sale Price = Original Price × (1 − Discount% / 100)

Savings = Original Price × Discount% / 100
Discount% = (Savings / Original Price) × 100
Original Price = Sale Price / (1 − Discount% / 100)

Worked Examples

Example 1: Sale Discount

A shirt originally priced at PKR 4,500 is on sale at 30% off.

Savings = 4,500 × 30/100 = PKR 1,350
Sale Price = 4,500 − 1,350 = PKR 3,150

Example 2: Find Discount Percentage

A laptop was priced at PKR 150,000 but is selling for PKR 127,500. What is the discount?

Savings = 150,000 − 127,500 = 22,500
Discount% = (22,500 / 150,000) × 100 = 15%

Example 3: Find Original Price

You see a phone selling for PKR 45,000 after a 25% discount. What was the original price?

Original = 45,000 / (1 − 25/100) = 45,000 / 0.75 = PKR 60,000

Stacked (Double) Discounts

Sometimes retailers offer two sequential discounts, such as "30% off, then additional 10% off." Stacked discounts do NOT simply add up — a 30% + 10% discount is not 40% off.

Correct calculation: Price after first discount = 100% − 30% = 70%. Price after second discount = 70% − (10% × 70%) = 70% × 90% = 63% of original. So you save 37%, not 40%.

Formula: Final Price = Original × (1 − D1/100) × (1 − D2/100)

Markup vs Discount — Know the Difference

Many people confuse markup and discount:

Discount = percentage reduction from the selling/retail price
Markup = percentage added to the cost price to arrive at the selling price

If a product costs PKR 1,000 and you mark it up 50%: Selling price = PKR 1,500. If you then offer a 50% discount: Sale price = PKR 750. You would sell at a loss! A 50% markup is NOT cancelled by a 50% discount. This is a common and costly business mistake.

Psychological Pricing: Spot Fake Discounts

Retailers sometimes inflate the "original price" to make the discount look bigger. Signs of a fake discount include: products always on sale, original price that seems unrealistic, "was PKR 10,000 now PKR 3,500" but it was never sold at PKR 10,000. In Pakistan and India, online shopping portals (Daraz, Flipkart, Amazon) have been criticized for such practices. Always check:

Price history using browser extensions (Camelcamelcamel for Amazon)
Other retailers' prices for the same product
Whether the product was ever actually sold at the stated original price

Frequently Asked Questions

How do I calculate 20% off a price?+

Multiply the price by 0.20 to get the savings, then subtract. Example: 20% off PKR 5,000 = 5,000 × 0.20 = PKR 1,000 savings. Final price = PKR 4,000. Quick mental trick: 20% = 2 × 10%. Find 10% (just move decimal one place), double it, subtract.

Is 30% off + 10% off the same as 40% off?+

No. Stacked discounts multiply, not add. 30% off then 10% off = 70% × 90% = 63% of original price = 37% total discount. You save 3% less than if it were a flat 40% discount. This is because the second discount applies to the already-reduced price, not the original price.

What is the difference between discount and rebate?+

A discount reduces the price at the point of sale — you pay less immediately. A rebate is a partial refund given after the purchase — you pay full price and receive a cashback later. Rebates are common in electronics and automotive (e.g., "PKR 5,000 cashback on this smartphone"). Discount is better from the buyer's perspective as it reduces immediate cash outflow.

How do businesses decide what discount to offer?+

Businesses consider: gross margin (you need the sale price to cover cost), competitor pricing, inventory clearance needs, customer acquisition cost, and the psychological impact of discounts. A business with 60% gross margin can offer up to 40% discount and still break even. Going beyond means selling at a loss. Smart discounting targets slow-moving inventory or strategically acquires new customers who will buy again at full price.

How is GST/VAT applied with a discount?+

Tax is generally applied on the discounted (final) price, not the original price. Example: Item PKR 1,000 with 20% discount = PKR 800. GST at 18% = PKR 144. Final price = PKR 944. In Pakistan, FBR requires that the invoice show the discount and calculate GST on the net price after discount. Always clarify whether the advertised price is inclusive or exclusive of tax.