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Early Payment Discount Calculator

Last reviewed: August 26, 2026

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Work out what an early-payment discount such as 2/10 Net 30 is really worth. The calculator shows the cash you save, the date the discount expires, the date the full balance is due, and, most usefully, the implied annual interest rate of passing the discount up.

The headline number is that implied APR. A 2/10 Net 30 discount is worth roughly 37 percent a year, which is why finance teams treat taking it as a near-automatic decision. For the full breakdown of the notation and the math, read the 2/10 Net 30 and early payment discounts guide.

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2/10 Net 30 Guide →Invoice Due Date Calculator →Late Payment Interest Calculator →What Is Net 30? →

How 2/10 Net 30 notation works

The shorthand splits into three parts. The first number is the discount percentage, the second is the discount window in days, and the figure after Net is the full payment term in days. So 2/10 Net 30 means take 2 percent off if you pay within 10 days, otherwise the whole amount is due in 30. The same pattern covers 1/10 Net 30, 3/10 Net 30, and 2/10 Net 60; only the three inputs change. All four deadlines are counted in calendar days from the invoice date, not business days, which is the standard convention for these terms.

Why the implied APR is the number that matters

Skipping a 2/10 Net 30 discount is the same as borrowing the discounted amount for the extra 20 days at a steep rate. Annualize that rate and a 2 percent discount works out near 37 percent a year. Framed that way the decision is simple: if your business can raise cash for less than the implied APR, whether from a line of credit, a card, or your own reserves, paying early is the cheaper option. The calculator does this annualization for you so you can compare the discount directly against your real cost of capital.

For informational purposes only

This calculator provides general estimates based on business day counting rules. It does not constitute legal advice. Deadlines in legal, regulatory, or contractual matters may be subject to jurisdiction-specific rules, court orders, or statutory exceptions. Always verify critical deadlines with a qualified professional.

Frequently Asked Questions

What does 2/10 Net 30 mean?
It is an early-payment discount term. The buyer can deduct 2 percent from the invoice if they pay within 10 days; otherwise the full amount is due in 30 days. The numbers vary, so 1/10 Net 30 is a 1 percent discount for paying inside 10 days, and 2/10 Net 60 gives the same 2 percent but with a 60-day full term.
Should I always take an early-payment discount?
Almost always, if you have the cash. The implied annual cost of skipping a 2/10 Net 30 discount is about 37 percent, far higher than most financing. The exception is when paying early would force you to borrow at an even higher rate or leave you short for payroll or tax. Compare the implied APR the calculator shows against your own cost of capital and take the cheaper path.
How is the implied APR calculated?
Divide the discount by what you actually pay, then annualize over the days of credit you give up. The formula is (discount / (1 minus discount)) multiplied by (365 / (payment term minus discount window)). For 2/10 Net 30 that is (0.02 / 0.98) times (365 / 20), which is about 37.2 percent. The calculator applies this automatically as you change the inputs.
What is a typical early-payment discount?
In the US and UK, 1 to 2 percent for paying within 10 days is the most common setup. In Germany the same concept, called Skonto, runs higher: 2 or 3 percent is normal and some sectors offer up to 5 percent. In Spain the descuento por pronto pago is usually 2 to 3 percent. The discount window is most often 10 days, but 7 and 15 also appear.
Is the discount applied before or after tax and shipping?
It depends on the contract, but the common convention is to apply the cash discount to the goods or services subtotal, before sales tax or VAT and before shipping. Many invoices state the discountable base explicitly. If yours does not, enter that base as the invoice amount here so the saving figure matches what the supplier will accept.