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Early payment discount calculator

Enter the discount and the days. See what the client pays, how much earlier you get the money and what the discount costs as a yearly rate.

Invoice amount (USD)

Discount (%)

Discount if paid within (days)

Otherwise due in (days)

Client pays if they pay early

$4,900.00

Terms on the invoice: 2/10 net 30
Discount: $100.00
Days earlier you get paid: 20
Compounded (APY): 44.6%
Annual cost of the discount: 37.2%

Offering it is like borrowing at 37.2% a year. Worth it only if waiting costs you more, for example an overdraft or a card balance at a higher rate. Estimate only. Nothing you type leaves your browser.

Reading the terms

2/10 net 30 means the client can take 2% off if they pay within 10 days; otherwise the full amount is due in 30. They get 2% for paying 20 days sooner, and you give up 2% to get the money 20 days sooner.

Why the annual rate is so high

2% for 20 days doesn't sound like much, but there are about 18 periods of 20 days in a year. The simple annual rate is 2 ÷ 98 x 365 ÷ 20 = 37.2%; compounded, it's 44.6%. That's the price of the cash you get early. Compare it with what you'd pay to borrow the same money, on a credit line or a card, for 20 days.

For a freelancer

Big companies sometimes take the discount automatically, and some pay on day 30 anyway and still take it. If you want faster payment without giving up margin, ask for a deposit, shorten your terms and add a card payment link. Late fees agreed in advance help too; see the late fee calculator.

IN SHORT

2/10 net 30 means 2% off if the invoice is paid within 10 days, otherwise the full amount in 30. The annual cost is d ÷ (1 − d) x 365 ÷ (net days − discount days): for 2/10 net 30, 2 ÷ 98 x 365 ÷ 20 = 37.2%, or 44.6% compounded. Offer it only if waiting 20 more days costs you more than that.

Prices and limits as of October 26, 2026.

Questions

What does 2/10 net 30 mean?

The client can take 2% off if they pay within 10 days of the invoice date. If not, the full amount is due in 30 days. On a $5,000 invoice, paying early saves them $100.

Is offering an early payment discount worth it?

Usually not for a freelancer. 2/10 net 30 costs 37% a year, more than most credit cards. It makes sense when you need cash now and the alternative is a loan at a higher rate, or when it gets a slow-paying client to pay on time.

What is 1/10 net 30?

1% off for paying within 10 days, otherwise due in 30. It costs about 18.4% a year, half the cost of 2/10 net 30.

What works better than a discount?

Shorter terms, a deposit up front and a card payment link on every invoice. A late fee written into your terms also pushes clients to pay on time without cutting your price.

Related calculators

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