How it works
How Discount & Tax Calculations Work
When stacking multiple discounts (e.g., 20% seasonal off plus an extra 10% loyalty coupon), retail math applies discounts sequentially rather than adding percentages directly, ensuring accurate margins.
- 1Calculate primary discount off original list price.
- 2If stacking or compounding, calculate secondary discount off the discounted subtotal.
- 3Deduct any fixed amount coupons.
- 4Compute sales tax strictly on the net discounted taxable subtotal.
FAQ
Frequently asked questions
How does stacked or compounded discount calculation work?
When stacking 20% and 10%, the 10% applies to the remaining 80% balance (equaling 8% of the original), giving a true 28% total discount rather than 30%. This preserves profitability while rewarding customers.
Is tax calculated before or after the discount?
In most jurisdictions, sales tax applies to the final discounted transaction price that the customer actually pays, rather than the original manufacturer suggested retail price.
Can I use this for wholesale quantity tiers?
Yes, you can toggle between single percentage, compound multi-tier percentage, and fixed monetary coupon deductions.
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