Percentage Points vs Percent: What Is the Difference?

What is a percentage point?

A percentage point is the simple arithmetic difference between two percentages. Eurostat's statistical glossary says the term is used when comparing two different percentages, abbreviates it as pp, and gives a plain example: a rate of 10% that increased to 12% increased by 2 percentage points.

The European Union's data visualisation guide stresses the same point: the simple difference between two percentages is not called a percentage, but a percentage point difference. To find it, subtract the earlier percentage from the later one.

What is percent change?

Percent change describes how large a change is compared with where you started. The formula, as given in the EU guide, is the new value minus the initial value, divided by the initial value, and then multiplied by 100 to express it as a percent.

For example, a price that moves from $50 to $60 changes by (60 − 50) ÷ 50 = 0.20, which is a 20% increase. The starting value is the baseline, so the same two numbers in reverse give a different answer: a drop from $60 to $50 is a decrease of about 16.7%.

The same change, described two ways

When the quantity itself is a percentage, such as a rate or a share, both descriptions apply at once. They answer different questions: the percentage point change tells you the size of the gap on the original scale, and the percent change tells you how big that gap is relative to the starting rate.

• Interest rate from 3% to 5%: up 2 percentage points, and up 66.7%.
• Poll support from 40% to 44%: up 4 percentage points, and up 10%.
• Conversion rate from 2% to 3%: up 1 percentage point, and up 50%.
• Unemployment from 5% to 4%: down 1 percentage point, and down 20%.
• Diagnosis rate from 1% to 5%: up 4 percentage points, and up 400%, a five-fold increase, as the Journalist's Resource points out.
• In the EU guide's study example, 2.1% of one group tested positive against 1.8% of another: a difference of 0.3 percentage points, or a relative difference of about 14%.

How to calculate each, step by step

Both calculations are short. The trick is deciding which question you are answering before you start.

Percent change is not symmetrical, which surprises many people. A fall from 50 to 25 is a 50% decrease, but a rise from 25 back to 50 is a 100% increase. The baseline is always the first number.

• Percentage points: subtract the earlier percentage from the later one. 5% − 3% = 2 percentage points.
• Percent change: subtract the starting value from the new value, divide by the starting value, and multiply by 100. (5 − 3) ÷ 3 × 100 = 66.7%.
• Direction: a negative result means a decrease, whichever measure you use.
• Baseline: always identify which number is the starting point, because swapping the order changes the percent result.

Why the confusion matters: interest, polls, and marketing

Imagine a loan whose interest rate rises from 4% to 5%. That is a 1 percentage point increase, but because interest equals the rate multiplied by the amount borrowed, the interest charged on the same loan rises by 25%. Both statements are true, and a borrower cares about the second one.

Polls work the other way around. If a candidate moves from 40% to 44%, saying their support rose 4 points is straightforward, while saying it rose 10% is also correct but sounds like a much smaller or larger move depending on who is listening. In marketing, a conversion rate that goes from 2% to 3% is a 1 percentage point gain and a 50% lift. The 50% figure sounds dramatic, while the percentage point figure shows the absolute scale. Responsible reporting gives both.

More everyday examples: tax, grades, and savings

The same pattern appears in everyday numbers, and working through a few makes the distinction stick.

• A sales tax rate rising from 7% to 8% is a 1 percentage point increase, but a shopper pays about 14.3% more tax on every purchase, because (8 − 7) ÷ 7 is roughly 0.143.
• A class pass rate climbing from 60% to 75% is 15 percentage points higher, which is a 25% relative improvement, since (75 − 60) ÷ 60 equals 0.25.
• A savings account rate cut from 4% to 3% is a fall of 1 percentage point, but the interest earned on the same balance drops by 25%.
• A discount of 20% followed by an extra 10% off is not 30% off. The second discount applies to the already reduced price, so a $100 item costs $72, a total reduction of 28%.

Which should you use?

The Journalist's Resource offers a simple rule: if you are comparing two percentages, it is percentage points. If you are describing how much a quantity changed relative to a previous number, it is percent. Choose based on what your reader needs to understand.

• Comparing two rates or shares, such as unemployment, tax rates, poll results, or conversion rates: percentage points are usually the clearest.
• Describing growth in a quantity, such as revenue, users, or prices: percent change.
• When the starting value is small, give both measures so the reader sees the absolute and the relative picture.
• For general audiences, consider words like doubled or tripled instead of increased 100% or increased 200%, as the Journalist's Resource suggests.

Common mistakes to avoid

Most misleading percentages come from a handful of repeated errors, and they are easy to avoid once you know them.

• Saying a rate rose 2% when it rose 2 percentage points, as when an interest rate moves from 3% to 5%.
• Reporting a huge relative change from a tiny base without the absolute figures. A rise from 0.1% to 0.3% is a 200% increase but only 0.2 percentage points.
• Averaging percentages that have different bases. 50% of 10 customers is 5 people and 10% of 1,000 customers is 100 people, so the combined figure is not 30%.
• Assuming increases and decreases cancel out. A 50% fall followed by a 50% rise leaves you at 75% of the starting value, not 100%.
• Treating a percent increase of a percentage as percentage points. A 10% increase in a 40% rate gives 44%, which is 4 percentage points, not 50%.
• Leaving the baseline unstated so the reader cannot tell what the change is relative to.

How to calculate both in a spreadsheet

Spreadsheets handle both measures well, but labeling matters. If the earlier value is in cell A2 and the later value is in B2, the percent change is (B2 − A2) ÷ A2, formatted as a percentage.

For percentage points, when both cells hold percentages, subtracting them with B2 − A2 gives a difference such as 0.02, which a percentage format will display as 2%. That 2% is really 2 percentage points, so label the column Change (pp) to prevent anyone from reading it as a percent change.

How to write it clearly

Clear wording removes most of the ambiguity before a reader has a chance to misread it.

• Call a simple subtraction of two percentages a difference in percentage points, as the EU guide advises.
• Show the starting and ending figures, as in from 3% to 5%, so the reader can check your math.
• When the stakes are high, give both measures in one sentence: up 2 percentage points, from 3% to 5%, a 67% increase.
• Spell out percentage points on first use, then use pp if you need to save space.
• Keep the number of figures per paragraph low, since the Journalist's Resource recommends limiting readers to about three numbers per paragraph.

Common questions about percentage points and percent

Can percentage points be negative? Yes. A rate that falls from 5% to 4% has changed by minus 1 percentage point.

Do I only use percentage points when comparing percentages? Yes. If the quantity is not a percentage, such as a price in dollars or a number of visitors, use percent change or the absolute difference instead.

Why do two reports give different numbers for the same change? They may be using different measures. One may state the percentage point change and another the relative percent change, and both can be correct.