The Sales Price Formula is the formula you use when and if you want to offer your customers discounts on your store for specific products. Once you check this box on your Price Formula, they will see the crossed price and the new discounted price.
So, when you check the box called "Use compare at price (this is a sale price formula)" you actually create a 'discount' formula.
To have this set up correctly you need to add a Markup on Sale Price in percentage in the field on the other side of the sale price formula box. The markup price is the old price of the product that will appear as crossed alongside your new discounted price.
For example: If you have the formula price 50GBP with a markup of 40%, then the markup price will be 70GBP (old crossed out price).