The short version
In 2/10 net 30 the first number is the discount percent, the second is the number of days to earn it and the last is the day the full amount is due. A client who skips a 2% discount to keep the cash 20 more days is paying about 37.24% a year for it, so most clients who can pay early do. Write the dates on the invoice, not only the shorthand.
Early payment discount calculator
Nothing you enter leaves this page. The yearly cost is simple, not compounded: discount percent / (100 - discount percent) x 365 / (net days - discount days).
2/10 net 30 on a $2,000 invoice
The invoice is dated November 1, 2026. Paid on or before November 11, the client owes $2,000.00 less 2%, which is $1,960.00, a discount of $40.00. After that the full $2,000.00 is due on December 1, 2026.
Skipping the discount means paying $40.00 more to keep $1,960.00 for 20 more days. That is $40.00 on $1,960.00, or 2.04%, for 20 days. Scaled to a year, 2 / 98 x 365 / 20, it comes to about 37.24%. It is a way for the client to compare the offer with what their own cash earns or costs. It is not a rate written into any contract.
Other terms, same $2,000 invoice
| Terms | Discount | Pay early | Extra days to pay | Cost of skipping, a year |
|---|---|---|---|---|
| 2/10 net 30 | $40.00 | $1,960.00 | 20 days | 37.24% |
| 1/10 net 30 | $20.00 | $1,980.00 | 20 days | 18.43% |
| 2/10 net 60 | $40.00 | $1,960.00 | 50 days | 14.90% |
The discount percent and the length of the window matter more than the net days. Stretching the net days from 30 to 60 cuts the yearly cost of skipping a 2% discount from 37.24% to 14.90%, which makes the discount less tempting. A 1% discount on net 30 is about half as strong as 2%.
When a discount makes sense
- You pay a supplier or a crew on a short cycle and a late client strains your cash.
- Your clients are businesses with a payables team that can act on a date.
- You would otherwise borrow, and the discount costs less than the borrowing.
- You are not already collecting on the due date. A discount for clients who pay early anyway only gives away margin.
A discount is the opposite of a late fee. One rewards early payment and the other charges for late payment, and some invoices carry both. The payment terms guide covers net 30 and the other usual terms, and the discount entry gives the short definition. To see how fast you collect now, use the DSO calculator.
How to write it on the invoice
2% discount if paid by November 11, 2026. Otherwise the full $2,000.00 is due December 1, 2026.
That line holds the percent, the date that earns it and the date the full amount is due. If you also charge a late fee, say when it starts. The invoice generator has a terms field for it.
Common questions
What does 2/10 net 30 mean?
It means the client may take a 2% discount if they pay within 10 days of the invoice date. If they do not, the full amount is due within 30 days. The first number is the discount percent, the second is the discount window in days, and the number after net is the final due date in days.
How is the cost of skipping the discount worked out?
Divide the discount percent by what the client pays if they take it, then scale it to a year. For 2/10 net 30 that is 2 / 98 x 365 / 20, which is about 37.24%. The 20 is the 30 days minus the 10-day window. This is the simple version and ignores compounding.
Is offering a discount for early payment worth it?
It depends on what your own cash costs you. A 2% discount for getting paid 20 days sooner works out to roughly 37% a year, which is more than most credit lines charge. If you rarely wait on cash, the discount just gives money away to clients who would have paid early anyway.
Does the discount apply to sales tax?
That is a term to agree and write down. Some businesses discount only the goods and services and leave tax alone, and others take the percent off the whole total. This calculator takes whatever invoice amount you enter, so enter the figure the discount applies to.
Where do I write the terms on the invoice?
Spell it out, not just the shorthand: 2% discount if paid by November 11, 2026, otherwise the full amount is due December 1, 2026. Clients read dates faster than they read 2/10 net 30.
What if the client pays on day 11?
The discount is gone. Decide in advance whether you will honor a late discount, and put the rule in the terms. Honoring it once usually means being asked for it every time.
What this is. A calculator and guide written by InvoiceTools. It is general information, not tax or legal advice. The invoice and the terms are examples.
Last reviewed by InvoiceTools, Houston, Texas, on 11 November 2026.