Discount impact calculator
Check what a discount does to the selling price and the amount left above your costs.
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Example values are filled in. Change them to match your business.
The costs of delivering this job or product. These stay the same after the discount.
Your selling price before applying the discount.
The percentage removed from the original selling price.
Your calculation
Price after discount
$270.00
- Entered cost
- $180.00
- Original amount above costs
- $120.00
- Amount above entered costs
- $90.00
- Margin
- 33.33%
- Reduction in amount above costs
- 25%
All amounts are in USD. Sales tax is excluded. Results reflect only the costs you enter.
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A small discount can take a larger share of profit.
The discount reduces your selling price while the entered cost stays the same. Compare the money removed from the price with the amount originally above costs. That share can be much larger than the discount percentage.
Discounted price = original price × (1 − discount ÷ 100)
A 10% discount on a $300 job
Illustrative amounts in USD, before sales tax. These are not recommended rates or margins.
- $300 original price − $180 cost = $120 originally above cost.
- $300 × (1 − 10 ÷ 100) = $270 after discount; $270 − $180 = $90 above cost.
- $30 removed ÷ $120 original amount × 100 = a 25% reduction.
The 10% price discount reduces the amount above costs by 25%. Margin falls from 40% to 33.33%, with the $180 cost unchanged.
Common questions
Why does a 10% discount reduce profit by more than 10%?
The discount is calculated on the entire selling price, while profit is only the part left after costs. If costs stay fixed, every dollar discounted comes out of that smaller amount.
Can a discount turn a sale into a loss?
Yes. When the discounted price is below your entered cost, the amount above costs and margin become negative. This tool assumes the same delivery cost before and after the discount and excludes sales tax.
Why are some percentages shown as not defined?
A 100% discount leaves a zero price, so margin cannot be calculated. A profit-reduction percentage is also undefined when the original sale has zero or negative profit; there is no positive starting profit to compare against.
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