Calculate the early payment discount (Skonto), the amount payable and the VAT correction. The calculator also shows which annual interest rate you effectively pay by skipping the discount, and whether taking it pays off even if you use your overdraft.
Rule of thumb: 2% discount within 10 days, net 30 ≈ 36.7% per year
Skipping the discount means taking a very expensive loan from your supplier. If the effective annual rate is higher than your overdraft rate, taking the discount usually pays off, even if you have to use the overdraft.
Example: “2% discount within 10 days, net 30 days”
€1,166.20
instead of €1,190.00 · payable within 10 days
Discount (gross)
€23.80
of which net: €20.00
of which VAT correction
€3.80
§ 17 UStG · 19 %
Effective annual rate
36.73 %
Rule of thumb: 36.00%
Credit period
20 days
30 − 10
Taking the discount pays off
Skipping the discount corresponds to 36.73% per year, which is above your overdraft rate of 10.00%. Financing the payable amount for 20 days via the overdraft costs about €6.48. You are left with an advantage of €17.32.
| Item | Invoice | Discount | After discount |
|---|---|---|---|
| Net | €1,000.00 | −€20.00 | €980.00 |
| VAT (19 %) | €190.00 | −€3.80 | €186.20 |
| Gross | €1,190.00 | −€23.80 | €1,166.20 |
2.0% discount: the shorter the gap between discount period and payment term, the more expensive skipping it becomes.
Discount = €1,190.00 × 2.00% = €23.80
VAT part = €23.80 × 19 / 119 = €3.80
Annual rate = 2.00 / (100 − 2.00) × 360 / (30 − 10) × 100 = 36.73%
The calculation uses a 360-day banking year. The credit period is the time between the end of the discount period and the payment term. The rule of thumb (discount rate × 360 / credit days) slightly underestimates the rate, because it relates the discount to the full amount instead of the amount actually paid.
Simplified entries with generic account names. Account numbers depend on your chart of accounts (e.g. SKR 03 or SKR 04 in Germany). Please check the booking with your tax adviser.
1. Invoice received
Debit
Credit
2. Payment with discount
Debit
Credit
Input VAT falls by €3.80: under § 17 (1) sentence 2 UStG the input VAT deduction has to be corrected, in the VAT return period of the payment.
No liability for the figures. This calculator is not tax or legal advice. Whether and how much discount you may deduct depends solely on your agreement with the supplier.
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