How to Calculate a Discount (and Work Backwards from the Sale Price)
Percentage-off maths is simple until you need the original price from a discounted one. Here's both directions, with examples retailers can use today.
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Forward: price to sale price
To apply a discount, multiply the original price by the discount percentage and subtract. Discount amount = original price × discount % ÷ 100. A AED 200 item at 15% off saves AED 30, giving a AED 170 sale price. The free Discount Calculator shows the amount, the final price, and the saving instantly.
Backwards: sale price to original price
This is where mistakes happen. To recover the original price from a discounted one, divide by (1 − discount/100). For 20% off, divide the sale price by 0.8 — you do not add 20% back.
Watch your margins
Discounts come straight off your contribution margin. A 20% discount on a product with a 40% margin wipes out half your profit on that sale. Before running a promotion, check what the discount does to profitability with the Profit Margin Calculator.
Keep promotions under control
- Decide the maximum discount your margin can absorb.
- Prefer time-boxed offers over permanent price cuts.
- Track the net effect on revenue, not just units sold.
Use the free Discount Calculator | Try the Profit Margin Calculator