Stacked discounts do not add up
A 20% discount followed by a further 10% is not 30% off. The second discount applies to the already-reduced price, so the combined effect is 28%.
The gap widens as the numbers grow. "50% off, then an extra 30%" sounds like 80% off. It is 65%.
The formula
Final price = After first × ( 1 − d2/100 )
Effective = ( Price − Final ) ÷ Price × 100
Worked example
₹2,500 with 20% then 10% off
- Original price
- ₹2,500.00
- After 20% off
- ₹2,000.00
- After a further 10% off
- ₹1,800.00
- Total saving
- ₹700.00
- Effective single discount
- 28.00%
What stacked discounts really give
| First | Second | Sum looks like | Actual |
|---|---|---|---|
| 10% | 10% | 20% | 19% |
| 20% | 10% | 30% | 28% |
| 25% | 25% | 50% | 43.75% |
| 50% | 20% | 70% | 60% |
| 50% | 30% | 80% | 65% |
If you are the one offering the discount
A discount comes entirely out of margin, not out of revenue proportionally. At a 40% margin, a 20% discount removes half your profit on that sale. Before running an offer, work out how many extra units you need to sell just to stand still — it is usually a larger number than expected.
The Profit Margin Calculator shows what a discount does to your margin, and Discount + GST handles the invoice side.
Frequently asked questions
How do I calculate two discounts together?
Apply them in sequence, not by adding. 20% then 10% leaves 0.8 × 0.9 = 0.72 of the original, so 28% off in total.
What is an effective discount rate?
The single percentage that would produce the same final price as the stack. It is always lower than the sum of the individual rates.
Is GST charged before or after the discount?
After, provided the discount appears on the invoice. Use the Discount + GST Calculator for the full invoice breakdown.