How to Calculate Discount and Sale Price (With Examples)
Whether you run a shop or just want to know if a sale is really a bargain, you need two things: the discount amount and the final price. Both come from one simple formula. You can also check any answer with our discount calculator.
Discount formulas
- Discount amount = original price × discount % ÷ 100
- Sale price = original price − discount amount
- Sale price (one step) = original price × (1 − discount % ÷ 100)
Worked example
A product is priced at ₹2,500 with 20% off.
- Discount amount = 2,500 × 20 ÷ 100 = ₹500
- Sale price = 2,500 − 500 = ₹2,000
The one-step way: 2,500 × 0.80 = ₹2,000.
What if there are two discounts?
Many sales say "20% off plus an extra 10% off". These do not add to 30%. The second discount applies to the already reduced price.
| Step | Calculation | Price |
|---|---|---|
| Original price | ₹2,500 | |
| After 20% off | 2,500 × 0.80 | ₹2,000 |
| After extra 10% off | 2,000 × 0.90 | ₹1,800 |
Total discount is ₹700, which is 28% of ₹2,500.
Adding GST after a discount
GST is normally charged on the price after a trade discount. With the example above and 18% GST: ₹2,000 × 1.18 = ₹2,360. Your invoice should show the discounted value as the taxable value. See GST invoice format for how to show it.
How to find the original price from the sale price
If you pay ₹2,000 after a 20% discount, the original price is 2,000 ÷ (1 − 0.20) = 2,000 ÷ 0.80 = ₹2,500. A common mistake is to add 20% to ₹2,000, which gives ₹2,400 and is wrong.
How to find the discount percentage
Discount % = (original − sale) ÷ original × 100. If a ₹1,200 item sells for ₹900: (1,200 − 900) ÷ 1,200 × 100 = 25%.
Giving discounts without hurting profit
Before you offer a discount, check what it does to your margin. If your margin is 20%, a 10% discount can cut your profit in half. Use the profit margin calculator and read how to calculate profit margin. Show the discount as a separate line on your quotation so the customer sees the value you are giving.
FAQs
Is a bigger discount always a better deal?
No. Compare the final price, not the percentage. 30% off an inflated price can cost more than 15% off a fair price.
Can I give a discount after the invoice is issued?
Under GST, a discount agreed after supply is usually handled through a credit note. Ask your accountant for the conditions that apply to your case.