On an invoice, 3/10 n/30 means the seller will take 3% off the total if you pay within 10 days of the invoice date; otherwise, the full (“net”) amount is due within 30 days. It is a shorthand for two deadlines and one discount, printed together so both sides know what is owed and when. The discount looks small, but passing it up is expensive: on an annual basis, it works out to roughly 55.67%.
What Each Part of 3/10 n/30 Stands For
The notation has four pieces, and each one carries a specific instruction:
- 3 is the discount percentage. Subtract 3% from the invoice total if you qualify.
- 10 is the discount window, in days from the invoice date.
- n is short for “net” — the full invoice amount, with no discount applied.
- 30 is the credit period, again in days from the invoice date. Miss it and the contract may add late-payment interest or penalties.
Both clocks start on the same day. If the invoice is dated the 1st, day 10 is the last day to claim the discount, and day 30 is the last day to pay without going late.
How to Calculate the Discount
Multiply the invoice total by 0.03 to get the discount, then subtract it from the total. On a $1,000 invoice, the 3% discount is $30, so paying within 10 days costs $970. Pay on day 11 or later (but still within 30 days), and you owe the full $1,000.
The same math on a $5,000 invoice:
- Discount: $5,000 × 0.03 = $150
- Pay within 10 days: $4,850
- Pay days 11–30: $5,000
The savings scale directly with the invoice. On a $50,000 order the same 3% is worth $1,500, and for a business that buys from the same supplier month after month, those numbers add up.
What It Costs You to Skip the Discount
Three percent sounds modest, but you are only accelerating payment by 20 days — from day 30 to day 10. Convert that into an annual rate and the picture changes. The standard formula is:
Annualized Rate = (Discount ÷ (1 − Discount)) × (360 ÷ (Credit Period − Discount Period))
For 3/10 n/30:
- 0.03 ÷ 0.97 = 0.030928
- 360 ÷ (30 − 10) = 18
- 0.030928 × 18 ≈ 55.67%
Passing on the discount is roughly the same as borrowing at 55.67% annual interest. If your business can draw on a line of credit, a credit card, or almost any other financing at a lower rate, paying inside the 10-day window is the cheaper option. This is why accounts-payable teams often flag discount invoices for priority processing.
When the 10-Day and 30-Day Clocks Start
The start date on the invoice controls both deadlines, and it is not always the day you got the goods. Under the Uniform Commercial Code, when a seller ships on credit the credit period generally runs from the time of shipment; post-dating the invoice or delaying its dispatch pushes the start of that period back by the same amount.1Legal Information Institute (LII) / Cornell Law School. UCC 2-310 – Open Time for Payment or Running of Credit; Authority to Ship Under Reservation
In practice, invoices name a specific date, and that date is what most sellers use to measure both the 10-day and 30-day windows. Some contracts key the clock to the day the buyer receives the goods, the day the invoice is issued, or the end of the month in which the invoice is dated (often abbreviated “EOM”). Because each of these shifts when your discount window closes, confirm the start date in the purchase agreement rather than assuming it matches the date printed at the top of the invoice.
How 3/10 n/30 Compares to Other Payment Terms
The 3/10 n/30 structure is one of a family of trade-credit notations. They all follow the same pattern — discount, discount window, credit period — with different numbers plugged in:
- 2/10 n/30: 2% off for paying within 10 days; full amount due in 30. The most widely used early-payment term.
- 1/10 n/30: 1% off for paying within 10 days; full amount due in 30. Common when the seller’s margins are too thin to give up more.
- 2/10 n/60: 2% off for paying within 10 days; full amount due in 60. The longer credit period gives buyers more breathing room.
- Net 30: No discount; full amount due within 30 days.
- Net 60: No discount; full amount due within 60 days.
The annualized cost of skipping each discount depends on the gap between the discount window and the credit period. A 2/10 n/30 term comes out to about 36.7% annualized. A 2/10 n/60 drops to roughly 14.7%, because you are giving up 50 extra days instead of 20. Comparing those rates against what your business pays to borrow is the cleanest way to decide, invoice by invoice, whether paying early is worth it.