VARYVIA GUIDE
Discount then tax: which comes first?
Understand how a discount and sales tax combine and why the order matters.
Typical order
For a standard sale calculation, apply the discount to the original price first, then calculate tax on the discounted subtotal. Local tax rules can differ, so check the rule that applies to your purchase.
Example
On a 500 price with 30% off, the discounted subtotal is 350. If a 15% tax applies to that subtotal, tax is 52.50 and the final total is 402.50.
Why adding percentages fails
A 30% discount followed by 15% tax is not the same as subtracting 15 percentage points overall. Each percentage is applied to a different base.