How a discount is calculated
The saving is the price multiplied by the discount percentage. A 25 percent discount on 80 is 20, so you pay 60. Another way to write it is price x (1 - discount), which is 80 x 0.75 = 60.
For stacked offers, apply them one after another, not by adding them. A 20 percent discount followed by another 10 percent is not 30 percent off. On 100, the first takes it to 80, the second to 72, which is 28 percent in total.
It helps to know what you really save when a shop advertises a percentage. Check whether a percentage applies to every item or only the cheaper one in a multi-buy. Work out the total price you will actually pay for the quantity you want.
Tax-exclusive prices
In many countries, including the United States, shelf prices exclude sales tax, and the tax is added at checkout. In that case tax is normally charged on the discounted price. With a 60 sale price and 8 percent tax, the tax is 4.80 and you pay 64.80.
Check the order. Some coupons are applied before tax, and others after, so the final amount can differ by a few cents or more on large purchases.
If you shop across state lines or online, the rate may depend on where the item ships. Enter the rate shown at checkout for the most accurate total.
Tax-inclusive prices and GST
In places that use GST or VAT, the tag often already contains the tax. To split it, divide by 1 plus the rate. A price of 1,180 with 18 percent GST included has a base of 1,180 / 1.18 = 1,000, so the GST is 180.
A common slip is subtracting 18 percent of 1,180, which gives 212 and a wrong base. The tax is a share of the pre-tax price, not of the total. The tax-inclusive option in the calculator does this for you, which makes it useful for invoices, expense claims and comparing prices between shops.
The same logic applies to VAT and other value-added taxes. Only the rate changes, for instance 5, 12, 18 or 28 percent for GST slabs or 20 percent for UK VAT.
Shopping and business uses
Shoppers can use it to compare a big percentage off a high price with a smaller one off a low price. Sellers can use it to check the margin left after a sale. Remember that the percentage changes the profit by far more than the price: on a 20 percent margin, a 10 percent discount removes half of the profit.
These are estimates for convenience. Rounding rules and local tax rules can change the exact total, so use your invoice or receipt as the official figure.