How to calculate a discount with sales tax
Short answer: final price = price × (1 − discount ÷ 100) × (1 + tax ÷ 100). For a $50 jacket at 20% off with 8% tax: 50 × 0.80 × 1.08 = $43.20. You save $10 before tax.
1. Take the discount off
Convert the percent to a multiplier: 20% off means you pay 80%, so multiply by 0.80. $50 × 0.80 = $40.
2. Add the sales tax
8% tax means you pay 108%, so multiply by 1.08. $40 × 1.08 = $43.20.
3. Watch out for stacked discounts
"20% off, then an extra 10% off" is 0.80 × 0.90 = 0.72, or 28% off, not 30%.
4. Common mistakes
- Adding percentages together instead of multiplying.
- Using the original price for tax when the store taxes the sale price.
- Forgetting that some items are tax-exempt.
Doing it with Calcwell
Open the Discount tool, enter price, discount and tax, and Calcwell shows the final price and how much you save. Save it to your history with a label like "Jacket sale" to compare stores later.
FAQ
Do you apply tax before or after the discount?
In most US states sales tax is charged on the discounted price, so take the discount off first, then add tax. The order doesn't change the result when both are percentages.
How do I calculate 20% off plus 8% tax?
Multiply the price by 0.80, then by 1.08. A $50 item: 50 × 0.80 = 40, 40 × 1.08 = $43.20.
Is 20% off then 10% off the same as 30% off?
No. Stacked discounts multiply: 0.80 × 0.90 = 0.72, which is 28% off, not 30%.