# Why do we round cash to two decimal points? **URL:** \ **Category:** Factual Questions\ **Created:** [March 20, 2021, 11:39pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328 "2021-03-20T23:39:31Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![phs3](https://avatars.discourse-cdn.com/v4/letter/p/8491ac/32.png) [@phs3](https://boards.straightdope.com/u/phs3)\ **Post date:** [March 21, 2021, 2:25am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/21 "2021-03-21T02:25:27Z")
Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel. It bothers my mild OCD if I’m visiting and in a cab where the increments aren’t even nickels, so every time it clicks I round it in my head, but that’s just me. ---
**Author:** ![don\_t\_ask](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@don\_t\_ask](https://boards.straightdope.com/u/don_t_ask)\ **Post date:** [March 21, 2021, 2:48am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/22 "2021-03-21T02:48:33Z")
> [@Princhester](#): > > Don’t tell me, let me guess. You do thousands of these reports per day and the rounded off cents get whisked into an account where no one misses them. > > The account is controlled by Mr D. Ask Ah no, you don’t understand. It’s very complicated. ---
**Author:** ![dtilque](https://avatars.discourse-cdn.com/v4/letter/d/d6d6ee/32.png) [@dtilque](https://boards.straightdope.com/u/dtilque)\ **Post date:** [March 21, 2021, 5:12am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/23 "2021-03-21T05:12:54Z")
> [@engineer\_comp\_geek](#): > > Half disme $0.05 > Cents $0.01 > Half cents $0.005 > > So if you want to know who is to blame for the creation of the modern nickels and pennies, it’s the U.S. Congress in 1792. Half di(s)mes are not the same as nickels. The half dime was silver coin which had half the amount of silver as the dime, so it was really small. It was replaced by a coin made up of copper and nickel in the middle of the 19th century. As far as mills, property taxes are often denominated in mills. But since that gets multiplied by the total value of the land+building, the result is always in dollars. I’ve seen reference to a higher denomination of US money: the Union is 10 Eagles. Not sure if that’s official. There’s never been any coins or bills issued in Unions, so likely it is not. ---
**Author:** ![SCAdian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/scadian/32/3292_2.png) [@SCAdian](https://boards.straightdope.com/u/SCAdian)\ **Post date:** [March 21, 2021, 6:16am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/24 "2021-03-21T06:16:24Z")
Double eagle = $20 Stella = $4 ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 21, 2021, 12:33pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/25 "2021-03-21T12:33:33Z")
Half dimes are the same as nickels, in the sense that the the coin commonly referred to as a nickel has a value of half a dime. Though it’s not marked that way any more, being instead marked as “five cents”. Though, the coin commonly called a dime is in fact still marked as being worth “One Dime”, not as “Ten Cents” or “Tenth of a Dollar”. ---
**Author:** ![Limmin](https://avatars.discourse-cdn.com/v4/letter/l/f04885/32.png) [@Limmin](https://boards.straightdope.com/u/Limmin)\ **Post date:** [March 21, 2021, 2:33pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/26 "2021-03-21T14:33:29Z")
> [@phs3](#): > > Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel. Cool! As usual Canada takes the lead… So how does it work? Do calculations often end in cents then get rounded manually, or are you more often handed a bill with the cents rounded to the nearest 0.05 or 0.10? ---
**Author:** ![naita](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naita/32/5862_2.png) [@naita](https://boards.straightdope.com/u/naita)\ **Post date:** [March 21, 2021, 2:37pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/27 "2021-03-21T14:37:46Z")
Money started out as authenticated pieces of precious metal. (Or possibly royal propaganda came first.) Your one gold piece would be worth ten times more than a tinier gold piece with 1/10 of the weight. If you had a silver piece, the exchange rate would depend on how much gold was valued compared to silver. Exchange rates were likely sticky by nature and then by fiat, but that leads to weird hoarding behavior and you have to keep changing what the official differences are and you have several hundred years of related messes before every came to their senses and went for just full fiat money. But in the formalization of exchanging different types of coin for each other various standards arose, the British one having pence, shillings and pounds. No decimal places, just counts of pence, shillings and pounds. Other countries had similar systems with two or three tiers of coins and occasionally they revised how many of one went into the other. The US appears to have been one of the first with a truly decimal currency system, followed by France, who of course went for it all the way and made absolutely everything decimal (at least for a while). Why didn’t everyone go to decimal coinage earlier? Remember nothing else was noted with decimals either, if you needed a sub-division you used a smaller unit. The strange thing isn’t why we “round cash”, it’s how thoroughly modern thinking has been decimalized to make that a question one would think to ask. ---
**Author:** ![FinsToTheLeft](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/finstotheleft/32/2930_2.png) [@FinsToTheLeft](https://boards.straightdope.com/u/FinsToTheLeft)\ **Post date:** [March 21, 2021, 2:51pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/28 "2021-03-21T14:51:18Z")
> [@Limmin](#): > > So how does it work? Do calculations often end in cents then get rounded manually, or are you more often handed a bill with the cents rounded to the nearest 0.05 or 0.10? It’s only on the total after tax. Many printed receipts say something like: $10.92 cash $10.90 Credit and debit charges are still to the $.01. More than 75% of all payments in Canada are cashless. ---
**Author:** ![Limmin](https://avatars.discourse-cdn.com/v4/letter/l/f04885/32.png) [@Limmin](https://boards.straightdope.com/u/Limmin)\ **Post date:** [March 21, 2021, 3:06pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/29 "2021-03-21T15:06:36Z")
Ah, makes sense. If we were to do away with cash altogether we could (and do) embrace cents once again. True in any country that manages this feat. ---
**Author:** ![Bootb](https://avatars.discourse-cdn.com/v4/letter/b/e19b73/32.png) [@Bootb](https://boards.straightdope.com/u/Bootb)\ **Post date:** [March 21, 2021, 3:12pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/30 "2021-03-21T15:12:54Z")
> [@Princhester](#): > > Don’t tell me, let me guess. You do thousands of these reports per day and the rounded off cents get whisked into an account where no one misses them. I once read a novel where a hacker doing exactly that was one of the plot points. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 21, 2021, 3:22pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/31 "2021-03-21T15:22:02Z")
> [@ekedolphin](#): > > Who came up with the idea of nickels and pennies? Why don’t we have half-pennies? Why do we have cents at all? Seriously. How young are you? When I was a kid pennies and nickels were valuable commodities. > [@Chronos](#): > > For what it’s worth, the US actually has five monetary units, not two. There are ten mills in a cent, ten cents in a dime, ten dimes in a dollar, and ten dollars in an eagle. Nobody ever uses them as units, but they’re defined as such. Technically, the eagle was a base-unit only for gold coinage. Silver, nickel and copper coins topped at a dollar. > [@Chronos](#): > > Gas stations price in a multiple of mills, but they’re still not really using them as units. Gas isn’t two thousand, nine hundred and ninety-nine mills a gallon; it’s two point nine nine nine dollars. Isn’t that like saying a yard isn’t thirty-six inches, it’s three feet? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 21, 2021, 3:47pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/32 "2021-03-21T15:47:18Z")
What I mean is, gas station prices are expressed in dollars. Even if nobody had ever defined a unit that was one thousandth of a dollar (or not even one that was a hundredth or a tenth), you could still define the price of a gallon of gasoline as 2.999 dollars. And in fact, most people who run gas stations probably don’t even know that the mill is a unit of money. ---
**Author:** ![markn\_1](https://avatars.discourse-cdn.com/v4/letter/m/f9ae1b/32.png) [@markn\_1](https://boards.straightdope.com/u/markn_1)\ **Post date:** [March 21, 2021, 4:24pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/33 "2021-03-21T16:24:04Z")
> [@Bootb](#): > > I once read a novel where a hacker doing exactly that was one of the plot points. It’s called “[salami slicing](https://en.wikipedia.org/wiki/Salami_slicing)” and has been done numerous times in real life as well. ---
**Author:** ![SCAdian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/scadian/32/3292_2.png) [@SCAdian](https://boards.straightdope.com/u/SCAdian)\ **Post date:** [March 21, 2021, 4:38pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/34 "2021-03-21T16:38:17Z")
> [@Limmin](#): > > > [@phs3](#): > > > > Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel. > > Cool! As usual Canada takes the lead… May 2012. Australian 1¢ and 2¢ coins were removed from circulation in 1991; New Zealand did the same in 1990, and then did awway with the 5¢ coin in 2006. ---
**Author:** ![Schnitte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/schnitte/32/9033_2.png) [@Schnitte](https://boards.straightdope.com/u/Schnitte)\ **Post date:** [March 21, 2021, 5:46pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/35 "2021-03-21T17:46:28Z")
> [@Chronos](#): > > For what it’s worth, the US actually has five monetary units, not two. There are ten mills in a cent, ten cents in a dime, ten dimes in a dollar, and ten dollars in an eagle. Nobody ever uses them as units, but they’re defined as such. Well, the [Coinage Act of 1792](https://en.wikisource.org/wiki/United_States_Statutes_at_Large/Volume_1/2nd_Congress/1st_Session/Chapter_16) does give preeminence to the dollar as _the_ monetary unit; it actually repeatedly uses the word “unit” as a synonym for dollar. The other coins that you list are all defined via their value relative to the dollar (plus their metallic content), but not by reference to the nearest neighbouring unit. So the act does not say that there are ten mills to a cent, ten cents to a dime, and ten dimes to a dollar; it says that the mill is a 1,000th of a dollar, and a cent 100th of a dollar. So I would say that the logic of the drafters of the act was to regard the dollar as the basis of the entire system and the other coins merely as multiples or fractions of the dollar; the system was not designed to be something like the pre-1971 British system, whereby you had 12 pence to a shilling and 20 shillings to a pound, with penny, shilling and pound being independent (but interrelated) monetary units coexisting in parallel. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [March 21, 2021, 6:12pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/36 "2021-03-21T18:12:16Z")
> [@Schnitte](#): > > the pre-1971 British system, whereby you had 12 pence to a shilling and 20 shillings to a pound, with penny, shilling and pound being independent (but interrelated) monetary units coexisting in parallel. That’s incorrect. The system was based on the penny, which was one pennyweight _(in troy weight) a unit of 24 grains or 1/20 of an ounce)_. It took 240 of them to make a pound troy of silver so there were 240 pennies in a pound. Shillings, florins etc were just convenient multiples. ---
**Author:** ![DesertDog](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/desertdog/32/11503_2.png) [@DesertDog](https://boards.straightdope.com/u/DesertDog)\ **Post date:** [March 21, 2021, 6:19pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/37 "2021-03-21T18:19:11Z")
> [@SCAdian](#): > > May 2012. Australian 1¢ and 2¢ coins were removed from circulation in 1991; New Zealand did the same in 1990, and then did awway with the 5¢ coin in 2006. Never gonna happen here, You see, the [company](https://en.wikipedia.org/wiki/Jarden_Zinc_Products) that makes the zinc planchets used for US 1-cent pieces ~~greases a lot palms~~ makes political donatons on both sides of the aisle. ---
**Author:** ![DavidNRockies](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidnrockies/32/6279_2.png) [@DavidNRockies](https://boards.straightdope.com/u/DavidNRockies)\ **Post date:** [March 21, 2021, 6:21pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/38 "2021-03-21T18:21:49Z")
It’s odd to me that both the penny _and_ the farthing have fallen out of favor, particularly since they made such a beautiful child together: > **[Penny-farthing](https://en.wikipedia.org/wiki/Penny-farthing)** > > Pages for logged out editors learn more > > The penny-farthing, also known as a high wheel, high wheeler or ordinary, is an early type of bicycle. It was popular in the 1870s and 1880s, with its large front wheel providing high speeds (owing to its travelling a large distance for every rotation of the legs) and comfort (the large wheel provides greater shock absorption). > It became obsolete in the late 1880s with the development of modern bicycles, which provided similar speed amplificatio... ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [March 21, 2021, 7:04pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/39 "2021-03-21T19:04:16Z")
> [@Napier](#): > > Looks like pennies have been around since the 1300s at least, while dollars appeared in the 1500s Much older than that. [The system of pence, shilling and pound was developed by Charlemagne in the 8th century](https://en.wikipedia.org/wiki/%C2%A3sd) and spread throughout his empire. It was once the standard for western Europe: > [@](#): > > **£sd** (occasionally written **Lsd** , spoken as “pounds, shillings and pence” or pronounced [/ɛl.ɛsˈdiː/](https://en.wikipedia.org/wiki/Help:IPA/English) [_ell-ess-DEE_](https://en.wikipedia.org/wiki/Help:Pronunciation_respelling_key)) is the popular name for the pre-decimal [currencies](https://en.wikipedia.org/wiki/Currency) once common throughout Europe, especially in the [British Isles](https://en.wikipedia.org/wiki/British_Isles) and hence in several countries of the [British Empire](https://en.wikipedia.org/wiki/British_Empire) and subsequently the [Commonwealth](https://en.wikipedia.org/wiki/Commonwealth_of_Nations). The abbreviation originates from the [Latin currency denominations](https://en.wikipedia.org/wiki/Ancient_Roman_units_of_measurement) _[librae](https://en.wikipedia.org/wiki/Libra_(weight))_ , _[solidi](https://en.wikipedia.org/wiki/Solidus_(coin))_ , and _[denarii](https://en.wikipedia.org/wiki/Denarius)_ .[[1]](https://en.wikipedia.org/wiki/%C2%A3sd#cite_note-1) In the [United Kingdom](https://en.wikipedia.org/wiki/United_Kingdom), these were referred to as _[pounds](https://en.wikipedia.org/wiki/Pound_sterling)_ , _[shillings](https://en.wikipedia.org/wiki/Shilling)_ , and _[pence](https://en.wikipedia.org/wiki/Pence)_ ( _pence_ being the plural of _penny_ ). > > Although the names originated from popular coins in the classical [Roman Empire](https://en.wikipedia.org/wiki/Roman_Empire), their definitions and the ratios between them was introduced and imposed across Western Europe by [Charlemagne](https://en.wikipedia.org/wiki/Charlemagne), King of the [Franks](https://en.wikipedia.org/wiki/Carolingian_Empire). The £sd system was the standard across much of the European continent (France, Italy, Germany, etc.) for nearly a thousand years, until the [decimalisations](https://en.wikipedia.org/wiki/Decimalisation) of the 18th and 19th centuries. As the United Kingdom remained one of the few countries retaining it into the 20th century, the system became particularly associated with Britain. It was King [Offa of Mercia](https://en.wikipedia.org/wiki/Offa_of_Mercia) who adopted the Frankish silver standard of _librae, solidi_ and _denarii_ into Britain in the late 8th century… > … > The £sd system prevailed across much of Western Europe. In French, it was known as the _livre_ , _sous_ and _denier_ , in Italian as _lira_ , _soldo_ and _denaro_ , in German as _pfund_ , _schilling_ and _pfennig_ and in English as _pound_ , _shilling_ and _penny_ . The English name _pound_ is a [Germanic](https://en.wikipedia.org/wiki/Germanic_languages) adaptation of the Latin phrase _libra pondo_ ‘a pound weight’.[[4]](https://en.wikipedia.org/wiki/%C2%A3sd#cite_note-4) ---
**Author:** ![Siam\_Sam](https://avatars.discourse-cdn.com/v4/letter/s/d78d45/32.png) [@Siam\_Sam](https://boards.straightdope.com/u/Siam_Sam)\ **Post date:** [March 21, 2021, 8:34pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/40 "2021-03-21T20:34:22Z")
Not every monetary system has subdivisions. In Japan, it’s just yen. No cents equivalent. [Previous page](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328.md?page=1) [Next page](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328.md?page=3)