Free tool
Early payment discount calculator
Enter the discount, the discount window and the full payment term. See what taking, or giving, the discount works out to as a yearly rate.
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Free to use. Paste this where you want it to appear. It runs in the visitor's browser, so nothing they enter is sent to us, and the line under it links back to this page.
How it works
How it works
A term such as 2/10 net 30 gives 2% off if you pay in 10 days, otherwise the full amount is due in 30. Paying 20 days early to save 2% is a return on the money you pay. Scaled up to a year, it is far higher than most loan rates.
The calculator shows a simple and a compounded annual rate. If you are the one offering the discount, the same number is what it costs you.
FAQ
About this calculator
What does 2/10 net 30 mean?
A 2% discount if you pay within 10 days, otherwise the full amount is due in 30 days.
Is taking the discount worth it?
Paying 20 days early to save 2% works out to roughly 37% a year, which is far more than most borrowing costs. If you have the cash, taking the discount usually wins.
How is the annual cost worked out?
The discount divided by the amount you actually pay, scaled up by how many times a year the early window fits in. The calculator shows a simple and a compounded figure.
Should I offer a discount to my customers?
Compare the annual figure with what it costs you to wait or to borrow. A small discount can be expensive to give.
Is anything saved?
No. The math runs in your browser and nothing you enter is sent to us.
Check how long customers take with the days sales outstanding calculator, estimate a late payment charge, or plan the cash with the cash flow calculator. More free tools: Operating leverage and break-even, DuPont analysis calculator, Net profit margin calculator, or see all free tools.
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General information, not tax or legal advice. How we write and check our tools.