Sale Price Calculator Formula
Understand the math behind the sale price calculator. Each variable explained with a worked example.
Formulas Used
Sale Price (before tax)
sale_price = discounted_priceSales Tax
tax_amount = discounted_price * tax_rate / 100Total After Tax
out_the_door = discounted_price * (1 + tax_rate / 100)Variables
| Variable | Description | Default |
|---|---|---|
retail_price | Retail Price(USD) | 149.99 |
markdown_pct | Markdown Percentage(%) | 30 |
tax_rate | Sales Tax Rate(%) | 8 |
discounted_price | Derived value= retail_price * (1 - markdown_pct / 100) | calculated |
How It Works
How to Calculate a Sale Price
The sale price is the original retail price reduced by the markdown percentage, with optional sales tax applied afterward.
Formula
Sale Price = Retail Price x (1 - Markdown% / 100)
Total = Sale Price x (1 + Tax Rate / 100)
Worked Example
A $149.99 pair of shoes is 30% off with 8% sales tax.
- 01Markdown multiplier: 1 - 30/100 = 0.70
- 02Sale price = $149.99 x 0.70 = $104.99
- 03Tax = $104.99 x 0.08 = $8.40
- 04Total out-the-door = $104.99 + $8.40 = $113.39
Frequently Asked Questions
Is tax calculated before or after the discount?
Sales tax is calculated on the discounted price, not the original price. The discount reduces your taxable amount.
What is the difference between markdown and discount?
They are essentially the same: both reduce the price by a percentage. Markdown is more commonly used by retailers, while discount is the consumer-facing term.
How do I calculate the original price from a sale price?
Divide the sale price by (1 - markdown%/100). For example, if a 30%-off item costs $104.99, the original is $104.99 / 0.70 = $149.99.
Ready to run the numbers?
Open Sale Price Calculator