How is a discount worked out?
Multiply the original price by the discount percentage (as a decimal) to get the saving, then subtract it. A $200 item at 25% off saves $50, leaving $150 before any tax.
// accounting › Sales & Retail Accounting
Discount Calculator
Final price and total savings after a percentage discount and an optional tax.
Final = (Price − Price·d) × (1 + tax)
Frequently asked questions
Why is tax added after the discount?
Tax is normally charged on what you actually pay, not the pre-discount sticker price. So the order is: take the discount off first, then apply the tax to the reduced amount.
What is the total savings figure?
It is the discount amount — the difference between the original price and the discounted price, before tax. It tells you how much the sale knocked off, separate from any tax that is then added back on.
How do I read the waterfall chart?
Read it left to right. The first bar is the original price. The next step drops down by the savings. The following step nudges back up by the tax. The final bar lands on what you actually pay — so you can see exactly how the price was built up.
Where is this used in real life?
Shopping — a $1,200 laptop at 15% off with 10% tax comes to $1,122. Sales planning — a retailer checking the takings after a storewide markdown. Budgeting — working out the true checkout total once both the sale and the tax are applied, so there are no surprises.