Topic
Discounts and prices
Price is the number that percentages get calculated around most. A discount is taken off the price, an increase is added to it, VAT is worked out on top of it and margin sits inside it. These are all the same calculation from different directions – which is exactly why they get muddled up so often.
This topic's calculators
Background on this topic
Where price calculations most often go wrong
Three mistakes come up again and again. The first is undoing a discount by adding the same percentage back on: an £84 sale price with 30% taken off doesn't return with 84 × 1.3 but with the division 84 / 0.7 = £120. The second is adding successive discounts together – −30% and −20% is 44%, not 50%. The third is subtracting VAT straight from the VAT-inclusive price, which gives too low a net price.
Which order to open the calculators in
If you're in a shop, start with the discount calculator. If you're pricing your own product, start with the margin calculator and add VAT last with the VAT calculator.
Other topics
All the site's calculators are grouped into six topics. The same calculator can belong to more than one, because a percentage calculation is rarely tied to just one situation.
Guides
Frequently asked questions about discounts and prices
How do I take a certain percentage off a price?
Multiply the price by the factor 1 − discount/100. For example, −40% means a factor of 0.6, so £75 × 0.6 = £45.
Can you add two discounts together?
No. The second discount is taken off the already-discounted price, so the factors are multiplied: 0.7 × 0.8 = 0.56, i.e. a total of 44%.
Does the consumer price include VAT?
Yes. In the UK the price shown to consumers includes VAT, so a discount is worked out from the VAT-inclusive price.
Should I compare the discount percentage or the unit price?
The unit price. A discount percentage only tells you the relation to the stated normal price, which can be set high on purpose.