Cashback Savings Calculator
Shows how much you actually get back once the cashback cap is applied.
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Formula
How the calculation works
The raw cashback is the spend multiplied by the cashback rate, and the cap then limits how much of it you actually receive.
The effective rate is the cashback received divided by the spend, which is the honest number to compare against a competing offer.
On spends below the cap the effective rate equals the headline rate, and above it the effective rate falls as the spend grows.
Common mistakes
- Comparing offers by the headline rate alone is misleading, because a low rate with no cap can beat a high rate with a low cap.
- Treating cashback as money in hand immediately: it usually arrives weeks later, and only if the purchase is not returned.
When to use it
- Use it when a cashback offer carries a cap and you want to know whether the spend is actually worth making for the reward.
- Skip it for uncapped offers where the effective rate is simply the advertised rate.
Worked example
Spending 5000 at 5% with a 200 cap returns 200, an effective 4%.
Common questions
Why is my effective rate lower than advertised?
The cap limits the payout, so on larger spends the real rate falls below the headline percentage.
Is cashback the same as a discount?
No, cashback is usually paid back later, so you pay the full price first and receive the money after.
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