Discount Calculator
Transparent formulaeCalculate a discounted price, customer savings and the commercial effect on your profit margin. Enter the original price and discount percentage to see the new price, customer savings and—if you add your cost—the impact on profit and margin erosion.
1Commercial Input Parameters
Enter unit cost to reveal margin erosion and dollar profit impact. Direct costs stay static when prices drop.
Australian GST Calculation (1/11th Rule)
Show the Margin Impact Clearly
Direct side-by-side comparison before and after discounting.
- Original Selling Price:
- $100.00 AUD
- Direct Unit Cost (COGS):
- $60.00 AUD
- Retained Gross Profit:
- $40.00 AUD
- Original Gross Margin:
- 40.0%
- Discounted Selling Price:
- $80.00 AUD
- Direct Unit Cost (COGS):
- $60.00 AUD
- Retained Gross Profit:
- $20.00 AUD
- Realized Gross Margin:
- 25.0%
Your selling price fell by 20%, but your gross profit fell by 50%. Overhead costs do not discount when prices drop. To clear the same total gross profit dollars at $20.00 profit per unit vs $40.00 per unit, you must sell 100% more volume (double units).
Maximum Allowable Discount Guardrail
Automated floor price guardrail based on your minimum acceptable gross margin.
Maximum discount you can offer before falling below 20.0% margin: 25.0%
- Absolute Floor Selling Price:
- $75.00 AUD
- Floor Gross Profit:
- $15.00 AUD
Quick Discount Scenarios Matrix
Direct matrix modeling for $100.00 original price with $60.00 unit cost.
| Discount % | New Customer Price | Dollar Savings | Gross Profit ($60.00 Cost) | Realized Margin % | Profit Impact Status |
|---|---|---|---|---|---|
| 0% | $100.00 | $0.00 | $40.00 | 40.0% | Baseline |
| 10% | $90.00 | $10.00 | $30.00 | 33.3% | -25.0% Profit |
| 20%Active | $80.00 | $20.00 | $20.00 | 25.0% | -50.0% Profit |
| 25% | $75.00 | $25.00 | $15.00 | 20.0% | -62.5% Profit (Margin Floor) |
| 30% | $70.00 | $30.00 | $10.00 | 14.3% | -75.0% Profit |
| 50% | $50.00 | $50.00 | -$10.00 | -20.0% | Loss Leader (Deficit) |
How the Calculation Works
Statutory transparency and step-by-step arithmetic equations.
Discount Amount
Original Price × Discount %
$100.00 × 0.20 =$20.00 AUDDiscounted Price
Original Price − Discount Amount
$100.00 − $20.00 =$80.00 AUDGross Profit
Discounted Price − Direct Cost
$80.00 − $60.00 =$20.00 AUDRealized Margin
(Gross Profit ÷ Disc. Price) × 100
($20.00 ÷ $80.00) × 100 =25.0%Commercial Reality on Fixed Direct Costs: Discounts reduce top-line revenue immediately while direct costs remain flat, amplifying the percentage drop in retained earnings. Overhead expenses (rent, electricity, permanent wages) remain unchanged.
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Wholesale PricingFrequently Asked Questions
Expert answers on discounting and profit margin preservation.
To calculate a percentage discount, convert the discount percentage into a decimal (divide by 100) and multiply it by the original selling price. Subtract that dollar discount amount from the original price to reach the final customer price. For example, for a 20% discount on a $100 product: $100 × 0.20 = $20 discount. The final price is $100 − $20 = $80 AUD.
This tool applies standard 10% Australian GST arithmetic to GST-inclusive supplies. Calculations do not factor in trade rebates, supplier settlement discounts, or variable merchant fees (e.g. EFTPOS / payment gateways). This tool is provided for commercial guidance and budgeting purposes only and does not constitute formal taxation or accounting advice.