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What a percent discount is

A percent discount subtracts a percentage of whatever amount it receives (the gross amount, or the gross amount minus a fixed discount if one runs first in the stack), applied independently to each billing calculation. It has no budget, no pool, and no lifecycle to track: it’s a stateless calculation, discount = value% × amount.

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How it compares to other discount types

Because the percentage scales with whatever the bill amount turns out to be, a percent discount behaves predictably across both small and large bills, unlike a fixed dollar discount, which has more relative impact on a small bill than a large one.

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The core mechanic

  1. Start from the gross amount (usage after quantity discounts, the pricing model, and minimum commitments), then subtract any fixed discount that runs ahead of it in the stack, per the default order.
  2. Apply the percentage to what’s left: discount = value% × amount.
  3. Subtract: invoice amount = amount − discount, floored at $0.

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How it treats PIT and POT identically

The discount engine treats point-in-time and period-of-time products identically: it receives a gross dollar amount and applies the percentage, without knowing or caring whether that amount came from a PIT meter or a POT allocation. If the gross amount it receives is already prorated (for a mid-period start, an amendment, or a cancellation), the discount simply reduces that already-prorated amount.

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Discount stacking and order

When multiple discounts apply to the same line item, they chain together through an explicit order: each discount’s output becomes the next discount’s input. Order changes the result:
The natural ordering applied across all three discount types is: quantity discount first (reduces units), then fixed discount (reduces dollars by a flat amount), then percent discount (reduces the remainder by a percentage). This ordering is more favorable to the business than the reverse. Multiple percent discounts compound rather than add: 20% plus 10% is 1 − (0.8 × 0.9) = 28%, not 30%. The order between multiple percent discounts never changes the result, since compounding is commutative.

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Where it sits in the overall calculation

Because a percent discount only ever touches the dollar amount, never quantity or which pricing bracket or tier applies, it works identically across every pricing model: per-unit, volume, tiered, package, step, and flat fee.

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Known edge cases

A 100% discount means the customer pays $0 indefinitely, so confirm this is intentional before configuring it.