Margin After Discount Calculator
Enter your original selling price, cost price and the discount you plan to offer — the calculator shows the resulting gross margin, how much margin the discount erodes, and whether you are still selling profitably.
%
Profit as a percentage of the discounted selling price
25 %
Net marginCost
60%
Gross profit
20%
Discount given away
20%
- 1
Discounted price
100 × (1 − 20 ÷ 100) = 80 - 2
Gross profit after discount
80 − 60 = 20 - 3
Gross margin after discount
20 ÷ 80 × 100 = 25Cost is unchanged, so margin shrinks faster than the discount percentage.
How does this calculator work?
Applying a discount leaves cost unchanged so gross margin shrinks faster than the discount rate. Margin after discount = (Discounted price − Cost) ÷ Discounted price × 100. Enter original price, cost and discount % to see the exact margin impact and how much revenue per unit you are giving away.
Formula
How this is calculated
Gross margin is the percentage of the selling price that remains after subtracting the cost of goods sold: Margin % = (Price − Cost) ÷ Price × 100. When you apply a discount you lower the selling price while the cost stays fixed, so the margin shrinks — often by more than the discount percentage itself.
For example, a product selling for £100 with a £60 cost has a 40% margin. A 20% discount drops the price to £80 and the margin to (80 − 60) ÷ 80 = 25% — the 20% discount cost 15 percentage points of margin. The calculator shows this exact trade-off: discounted price, margin before and after the discount, the number of margin points lost, and the revenue given away per unit.
The model focuses on gross margin per unit and ignores fixed overhead, tax and volume effects. Volume discounts can increase total gross profit even as per-unit margin falls — if that is your scenario, multiply the post-discount gross profit per unit by the expected unit uplift and compare it to the undiscounted baseline.
Frequently asked questions
Because the margin percentage is calculated on the now-lower selling price, not the original one. Each percentage point of discount removes a larger slice of the remaining margin. The closer the price is to cost, the more severe the erosion for the same discount.
The break-even discount is 1 − (Cost ÷ Price). For a product with a 40% margin, the maximum discount before losing money is 40% of the original price. Anything beyond that and the discounted price falls below cost.
Yes, if the volume increase from the discount more than compensates. This calculator shows per-unit margin; multiply the post-discount gross profit per unit by the expected unit uplift to estimate total gross profit and compare it to the undiscounted baseline.
TG we-Calculate Editorial Team. (2026). Margin After Discount Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/margin-discount-calculator
TG we-Calculate Editorial Team. "Margin After Discount Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/margin-discount-calculator.
TG we-Calculate Editorial Team, "Margin After Discount Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/margin-discount-calculator
@misc{wecalculate_margin_discount_calculator, title = {Margin After Discount Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/margin-discount-calculator}}, year = {2026}, note = {TG we-Calculate} }
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