A client wants 2% off for paying early, or you are thinking of offering it to get paid faster. Enter the invoice and the terms to see the discount deadline, what the client pays, and what that discount really costs as a yearly rate. Free, and no signup needed.
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Cash is tight, a big invoice is sitting at Net 30, and someone suggests offering a small discount if the client pays inside ten days. Or the opposite: a client's accounts team asks for 2/10 net 30 before they sign. Two percent sounds like nothing. The calculator above shows why it is not: knocking 2% off to get paid 20 days early works out to about 37% a year, which is far more than most business loans or credit lines charge. Sometimes that is still worth it. You should know the number before you agree.
2/10 net 30 is an early payment discount: the client can take 2% off the invoice if they pay within 10 days of the invoice date, and otherwise owes the full amount within 30 days. On a $1,000 invoice, that means paying $980 by day 10 or $1,000 by day 30.
The first number is the discount, the second is the discount window in days, and "net 30" is the normal deadline. 1/10 net 30 and 2/10 net 60 work the same way with different numbers.
The discount buys you the money sooner, so the fair way to judge it is as the cost of borrowing for those extra days. The calculator uses the standard formula: discount % divided by (100 minus discount %), multiplied by 365 divided by the days paid early (the full-payment days minus the discount days). For 2/10 net 30 that is 2 ÷ 98 × 365 ÷ 20, which is 37.24%. Some finance textbooks use a 360-day year, which gives 36.73% for the same terms; the calculator shows both.
| Terms | Days paid early | Effective annual rate (365-day year) |
|---|---|---|
| 1/10 net 30 | 20 | 18.43% |
| 2/10 net 30 | 20 | 37.24% |
| 3/10 net 30 | 20 | 56.44% |
| 2/10 net 60 | 50 | 14.90% |
Compare the effective annual rate with what it would cost you to get the same cash another way, such as an overdraft, a credit line or a business loan. If the discount is cheaper than the money you would otherwise borrow, or a late payment would cost you more (a missed supplier deadline, payroll you cannot cover), offering it can be worth it. If you have cash to spare, it is usually an expensive way to be paid a few weeks sooner.
Buyers use the same test the other way round. The US Treasury's guidance for federal payments is to take a discount and pay early when its effective annual rate is higher than the current value of funds rate, and to pay near the due date when it is lower (Bureau of the Fiscal Service, Formula and Calculator for Discounts). So if a client asks for 2/10 net 30, expect them to take it whenever they can.
Worth knowing before you change your terms at all:
From our invoice data: Shorter terms bring the money in sooner: invoices due on receipt are paid in 15.9 days on average and Net 30 invoices in 47.2 days, while the share paid by the due date barely changes (39.1% against 42.3%).
Source: Billbooks invoice payment study, 53,095 paid invoices from 180 businesses, 2007 to August 2026. See the invoice payment study
In other words, shortening your standard terms can speed payment up without giving anything away. A discount is a second lever, not the first one to reach for.
Enter the invoice amount and date, then pick the terms. For anything other than the three common presets, choose "Custom terms" and enter the discount percentage, the discount window and the days until the full amount is due. The results update as you type: the date and amount the client pays to get the discount, the discount itself, the full amount and its due date, and the effective annual rate. If you put early payment terms on an invoice, state the discount deadline as a date as well as the terms, so nobody has to count.
The calculator counts calendar days from the invoice date. Some contracts count from the date the invoice is received instead, so check yours.
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For the full background on these terms, read our guide to 2/10 net 30.
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