Discount Calculator
Calculate sale prices, discount amounts, and original prices — and see exactly how a discount affects your profit and margin, not just your selling price.
This calculator provides mathematical estimates based on the prices, discount, and optional costs you enter. Actual business profitability may vary depending on taxes, fees, operating expenses, returns, discounts, and other costs.
A discount percentage is not a profit percentage
The single most important thing to understand before running a sale — a small discount can cut your profit by far more than the discount itself.
Discount
20%
off the selling price
Profit reduction
50%
less profit than before
A 20% discount does not mean you lose 20% of your profit. Your cost doesn't change when you discount a price — the entire discount comes out of your profit, and profit is usually a much smaller number than the selling price, so the same peso amount is a much bigger percentage of it.
| Before discount | After 20% discount |
|---|---|
| Cost: ₱600.00 | Cost: ₱600.00 (unchanged) |
| Price: ₱1,000.00 | Price: ₱800.00 |
| Profit: ₱400.00 | Profit: ₱200.00 |
How is a discount calculated?
What is a discount?
A discount is a reduction from a product or service's original price, usually expressed as a percentage. A 20% discount means the customer pays 20% less than the original price.
Discount amount
₱1,000 × 20% = ₱200.
Sale price
₱1,000 − ₱200 = ₱800. This is the same as Original Price × (1 − Discount Rate): ₱1,000 × 0.80 = ₱800.
How do I find the original price?
₱800 ÷ (1 − 0.20) = ₱800 ÷ 0.80 = ₱1,000. This is not the same as ₱800 × 1.20, which gives ₱960 — the wrong answer. Multiplying the sale price by (1 + discount) applies the discount percentage to the wrong base (the smaller, already-discounted price), so it overcorrects. Dividing by (1 − discount) reverses the original multiplication exactly.
Why can't I simply add discount percentages?
Sequential discounts multiply what remains of the price — they don't add. A 20% discount followed by a 10% discount is not a 30% discount:
₱1,000 → 20% off → ₱800
₱800 → 10% off → ₱720
Effective discount: 100% − (₱720 ÷ ₱1,000 × 100) = 28%, not 30%.
Each discount applies to whatever price is left after the previous one, not to the original price again — so two discounts always add up to less than their sum would suggest.
Discount vs. markdown
A discount reduces the price from the original or list price — usually temporary, like a promotion or coupon. A markdown is a reduction to the selling price itself, commonly used in retail to move slow-selling inventory. In everyday use, both describe a lower price, and this calculator works the same way for either.
Examples
Basic sale
Original ₱1,000.00 · Sale ₱800.00
Reverse discount
Original ₱1,000.00 · Sale ₱800.00
Business profit impact
Original ₱1,000.00 · Sale ₱800.00
No discount
Original ₱1,000.00 · Sale ₱1,000.00
0% is a valid discount — the sale price simply equals the original price.
100% discount
Original ₱1,000.00 · Sale ₱0.00
The item is free — the sale price drops to ₱0, and the full original price is discounted.
Find the discount
Original ₱1,000.00 · Sale ₱800.00
How discounts connect to margin and markup
How discounts affect profit margin
A discount doesn't just reduce revenue — if your cost stays the same, it reduces both your profit and your profit margin, since margin is profit as a percentage of your (now lower) selling price.
How discounts affect markup
Markup measures the same profit as a percentage of your cost instead of your selling price — a different number from margin, but it moves the same direction: down, whenever a discount cuts into profit.
Important information
A discount comes out of your profit, not your cost
Your cost to acquire or produce an item doesn't change when you discount its price — every peso of the discount reduces your profit directly, which is why a modest-looking discount can cut profit by a much larger percentage.
A discount doesn't guarantee your business stays profitable
A single sale price might still be profitable at 20% off, but running frequent or deep discounts across many products can erode overall business profitability once rent, salaries, and other costs are factored in.
What this calculator actually computes
With just a price and a discount, this gives you the sale price and savings. Add a cost to see product-level profit and margin — not automatically your full net profit, which also depends on operating expenses.
Taxes and fees aren't included automatically
This calculator doesn't calculate VAT, percentage tax, or income tax. If platform or payment fees apply to your sale, they aren't reflected in the profit or margin figures shown here.
Frequently asked questions
Discount Amount = Original Price × Discount Rate. A 20% discount on ₱1,000 is ₱1,000 × 0.20 = ₱200.
Sale Price = Original Price − Discount Amount, or equivalently Original Price × (1 − Discount Rate). ₱1,000 with a 20% discount is ₱1,000 × 0.80 = ₱800.
Original Price = Sale Price ÷ (1 − Discount Rate). An ₱800 sale price at 20% off means the original price was ₱800 ÷ 0.80 = ₱1,000. This is not the same as ₱800 × 1.20 (₱960) — see "Why can't I just multiply by 1.20?" below.
₱1,000 × (1 − 0.20) = ₱800. You save ₱200.
If your cost stays the same, a discount comes entirely out of your profit. A ₱600-cost item priced at ₱1,000 earns ₱400 profit; discounted 20% to ₱800, it earns only ₱200 — the profit was cut in half even though the discount was only 20%.
No, and this is the most common pricing mistake. A discount percentage is taken off the selling price; the resulting profit reduction is usually a much larger percentage of your (smaller) profit. See "Why a 20% discount can cut your profit in half" above for the full example.
Sequential discounts multiply the remaining price, they don't add. 20% off followed by 10% off leaves 80% × 90% = 72% of the original price — a 28% effective discount, not 30%.
No. ₱1,000 → 20% off → ₱800 → 10% off → ₱720. That's a 28% effective discount (100% − 72%), not 30%.
A discount reduces a selling price from its original/list price. Markup is how a selling price is built up from cost in the first place (Cost × (1 + Markup)). They describe different steps in pricing a product — see the Markup Calculator for the cost side of the equation.
A discount is a reduction applied to your selling price. Profit margin is what percentage of a selling price is profit after cost. A discount doesn't change your cost, so it directly reduces both your profit and your margin — see "How Discounts Affect Profit Margin" below.
Yes, in "Calculate Sale Price" mode — a 100% discount makes the item free (Sale Price = ₱0). It isn't supported when calculating backward from a sale price to an original price, though: every original price collapses to ₱0 at 100% off, so a ₱0 sale price can't be traced back to a unique original price.
No. This calculator estimates discounts, sale prices, and — if you enter a cost — product-level profit and margin. It doesn't calculate VAT, percentage tax, income tax, or platform/payment fees.
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