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A 1,000 invoice on 2/10 net 30
The invoice is 1,000. Terms are 2 percent if you pay by day 10, and the full amount by day 30. The year count is 360, which is the count in NOAA’s table. The funds rate in the last box is 4 percent.
Invoice amount: 25% lower
Change invoice amount to 750 while keeping the other example values the same.
Invoice amount: 25% higher
Change invoice amount to 1,250 while keeping the other example values the same.
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Quick answer
What does the Early payment discount calculate?
What does skipping an early-payment discount cost for a year? This calculator uses invoice amount, discount, discount window, net due, days in the year, and funds rate to compare to estimate annual cost of skipping the discount immediately in your browser.
With the values currently entered, the result is 36% — effective annual discount rate. It also shows discount saved, amount if you pay early, rate on the unpaid balance, and exhibit comparison.
How to use the Early payment discount
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Invoice amount
- Discount — entered in %
- Discount window — entered in days
- Net due — entered in days
- Days in the year — entered in days
- Funds rate to compare — entered in %
Early payment discount formula
Table rate = discount rate × days in the year ÷ (net days − discount days). NOAA’s table uses 360 days and prints 36.0 percent for 2/10 net 30.
Assumptions
- NOAA’s NAO 203-31 Exhibit 4 lists 2/10 net 30 as a 36.0 percent effective annual discount rate. That printed rate is the discount percent times 360, divided by the 20 days between day 10 and day 30.
- The exhibit takes the discount only when that rate exceeds the Treasury Current Value of Funds Rate. The Fiscal Service calculator page showed 4.00 percent for that rate on February 26, 2026. Replace the 4 if the bulletin has changed.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Converts discount terms to an effective annual discount rate and compares it with the Treasury Current Value of Funds Rate. The ready-reference table lists 2/10 net 30 as 36.0 percent, using a 360-day year.
Prompt payment discount calculatorBureau of the Fiscal ServiceScope: US federal prompt-payment discountsCompares an effective annual discount rate with the current value of funds rate. The page showed 4.00 percent as that rate when last updated on February 26, 2026. The rate is revised, so type the figure you want to compare.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Early payment discount example and edge cases
Terms such as 2/10 net 30 take a percent off the invoice if you pay inside a short window. NOAA’s exhibit turns those terms into an effective annual discount rate. Its table lists 2/10 net 30 as 36 percent on a 360-day year.
Example: A 1,000 invoice on 2/10 net 30
The invoice is 1,000. Terms are 2 percent if you pay by day 10, and the full amount by day 30. The year count is 360, which is the count in NOAA’s table. The funds rate in the last box is 4 percent.
- Invoice amount
- 1,000
- Discount
- 2 %
- Discount window
- 10 days
- Net due
- 30 days
- Days in the year
- 360 days
- Funds rate to compare
- 4 %
Calculated result36%effective annual discount rate
Paying by day 10 saves 20, so you pay 980. The table rate is 36 percent. NOAA takes the discount when that rate is higher than the funds rate. Here 36 is higher than 4. Confirm the current funds rate before you pay.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the annual rate first. Then check the dollars the discount saves. A 20 dollar saving on a 1,000 invoice is the 2 percent. The 36 percent spreads that saving across the 20 extra days, on a 360-day year.
- The funds rate is a comparison input. The Fiscal Service calculator page showed 4.00 percent on February 26, 2026. That rate is revised, so replace the 4 if the bulletin has moved.
Edge cases worth checking
The supplier’s year uses 365 days
Change the year box from 360 to 365. On these same 2/10 net 30 terms the table rate becomes 36.5 percent. NOAA’s printed table uses 360.
Day 10 has already passed
The 36 percent assumes you can still pay inside the window. After day 10 the discount is gone, and the choice is whether the invoice is late.
What changes the result most
Invoice amount
Use a current amount for invoice amount. Include fees or recurring costs that belong in the same figure.
Discount
Test a lower and higher discount. A small percentage change can move the final result more than expected.
Discount window
Test a lower and higher discount window. A small percentage change can move the final result more than expected.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Invoice amount: 25% lower
75036%effective annual discount rate
Invoice amount: 25% higher
1,25036%effective annual discount rate
Discount: 25% higher
3 %54%effective annual discount rate
Common mistakes
Check invoice amount
NOAA’s NAO 203-31 Exhibit 4 lists 2/10 net 30 as a 36.0 percent effective annual discount rate. That printed rate is the discount percent times 360, divided by the 20 days between day 10 and day 30. Make sure this matches the number you enter.
Keep funds rate to compare consistent
The exhibit takes the discount only when that rate exceeds the Treasury Current Value of Funds Rate. The Fiscal Service calculator page showed 4.00 percent for that rate on February 26, 2026. Replace the 4 if the bulletin has changed. Use the same units and time period throughout the calculation.
Do not rely on one early payment discount scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What does skipping an early-payment discount cost for a year?
It does not replace a quote, contract, accountant, or local employment guidance.