Percent Off: What a Sale Tag Actually Saves You

Nobody stands in a shop doing long division, which is rather the point of the tag. Most of the arithmetic behind a discount is genuinely simple, but two situations trip people up reliably: stacked discounts, and working out what percentage a "was £80, now £56" tag is actually offering.

Reading a sale tag in one step

Skip the two-step approach of finding the discount and subtracting it. Multiply once instead. For 40% off, multiply by 0.60. For 25% off, multiply by 0.75. An $85 jacket at 40% off is $51, and you never had to calculate the $34 saving to get there.

Reverse tags need the other direction. A coat marked down from £80 to £56 has come down £24, and £24 divided by £80 is 0.30, so it is 30% off. Doing this is worth the ten seconds, because "save £24" and "30% off" land very differently in the head and stores choose whichever one sounds larger.

The version you can do in the queue

Find 10% by moving the decimal point one place, then build from there. For 15% off £60: 10% is £6, half of that is £3, so £9 comes off and you pay £51. For 30% off, take 10% and triple it. For 45%, take half then add back 5%. It is not elegant but it is fast, and it is accurate enough to tell you whether to keep walking.

Stacked discounts are smaller than they look

A rail marked 50% off with an extra 20% at the till is not 70% off. The second discount applies to the already reduced price. A £120 coat goes to £60 at 50% off, then 20% off £60 takes it to £48. Total saving £72, which is 60% off, not 70%.

The shortcut is to multiply the remainders: 0.50 times 0.80 is 0.40, so you pay 40% and save 60%. Order does not matter, which surprises people; 20% first then 50% lands on the same £48. Our double discount guide works through the stacked cases in more detail, including coupons that exclude sale items.

Where tax lands in the sum

In the US, sales tax is added after the discount, so the tag price is what gets reduced and the tax follows. That $51 jacket in a state with 8% tax comes to $55.08 at the register. In the UK, VAT is already inside the shelf price, so a 40% reduction reduces the VAT proportionally and there is nothing further to add. This is the single biggest reason a US shopper and a UK shopper describe the same discount differently.

Using the calculator and where to find the inputs

The original price is the pre-discount figure on the tag, the one usually struck through. Be a little sceptical of it on clearance items, because a "was" price that only held for a fortnight tells you nothing about value. The discount field takes the percentage as a whole number, so 40, not 0.40.

For stacked offers, enter the first discount, take the result, and run it through a second time. For "buy one get one half price", the honest figure is 25% off across the two items, because you are paying 1.5 units for 2. For a 3 for 2 offer, it is 33.3% off, assuming the items cost the same and you wanted all three. If you are comparing several different offer types on the same product, the discount calculation walkthrough puts them on a common footing.

Common questions

Is 50% off then 20% off the same as 70% off? No. It works out at 60% off, because the second reduction applies to the reduced price. The gap grows with bigger numbers: 50% and 50% gives 75% off rather than 100%, which is the obvious version of the same point.

How do I work out the original price from a sale price? Divide by the remainder rather than adding the percentage back. An item costing $63 after 30% off was $63 divided by 0.70, which is $90. Adding 30% to $63 gives $81.90 and is simply wrong.

Does the discount come off before or after sales tax? Before, in the US. Tax is calculated on what you actually pay, so a discount reduces the tax as well as the price. UK prices already include VAT, so the question does not arise on the shop floor.

Is a percentage off always better than a dollar amount off? It depends on the price. On a $30 item, $10 off beats 25% off. On a $200 item, 25% off is worth $50 and wins easily. The crossover is wherever the fixed amount equals the percentage of that price, which is $40 in this example.