How to calculate cashback? example calculation and simulator

How to calculate cashback? example calculation and simulator

On this site, we like to share good tips for saving money… and cashback is just one of the good tips we like to talk to you about! Cashback is simple: you buy from partners of cashback sites, then part of your order is refunded in cash. You earn money, or at least you are reimbursed for part of your purchases – for a purchase that you were planning to make anyway, it’s all “profit”! But if you are here, it means that you are still hesitating to use cashback… You are probably asking yourself a few questions: what is cashback, how does it work and above all, you want to know how calculate cashback ? We will answer your questions in this guide. We’ve even created an online cashback simulator that lets you quickly calculate how much you can earn with cashback! We also explain the different types of cashback and the calculation of these cashbacks in detail.

Cashback calculation

Cashback, simply put, is a trading mechanism to motivate you to buy from one merchant over another. Thus, this one is ready to return part of the amount of your order to motivate you to do so. Cashback sites therefore connect these merchants with consumers. As soon as you buy from one of the partner merchants of the cashback sites, then you are rewarded in cash for part of the amount of the order. Of course, the cashback site does not do this for free, it also earns money. However, it distributes most of these generated revenues to its users! To understand how to calculate a cashback, it is important to specify that there are 2 types of cashback: cashback with a fixed amount and cashback with a percentage.

Fixed amount cashback

This is very easy to calculate since the amount is fixed, therefore independent of that of your order. Simply buy from the partner to receive a fixed sum. Take the example of Disneyland Paris: for booking a stay, you can receive up to €30 depending on the type of stay and hotel booked. You just have to respect the eligibility conditions of the cashback to receive it.

Cashback in percentageCashback in percentage

This is where there is a calculation to be made, when the cashback is in percentage: the amount of cashback will depend on the amount of the order. The cashback is indeed calculated on the amount of the order excluding tax and costs (delivery, insurance, additional services, etc.).

Take the example of Nike. I made a basket and I have some for €389.97:

First, you will remove the VAT from the price. Some sites show you the amount excluding tax directly, but if this is not the case, you will do a simple calculation:

Amount excluding tax: The amount of the order including tax / 1.2

In our example, this gives: €389.97 ÷ 1.2 = €324.975 excluding VAT

If there are shipping costs, you do not take this into account in the calculation either. Only the amount excluding VAT of the products ordered is taken into account in the calculation of the cashback!

Secondly, calculate the cashback:

Cashback amount: the amount of the order excluding VAT – the percentage of cashback

In our example, this gives: €324.975 x 0.02 = €6.49

Your cashback will therefore be €6.49.

To calculate a percentage from an amount, you can multiply the amount by 0.xxx:

1% = 0.01

5% = 0.05

10% = 0.10

And so on.

Online cashback earning simulator

If, however, you want to save time, we have created a simulator that makes it quick and easy to calculate cashback. Indeed, you just need to fill in the information below for the calculation of the cashback to be done automatically:

The best cashback sites

That’s it, the cashback has convinced you! Want to earn money on your online purchases this way and sign up… Here are my top 5 cashback sites:

In order to have a greater choice of merchant sites offering cashback, I recommend that you register on the 5 sites listed.

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