Percentage Points vs Percent
Percent measures a part of 100. Percentage points measure the gap between two percents. Basis points split each percentage point into 100 smaller units. Mixing these up turns a 2-point rise into a claim of “2% growth” that is not what happened.
The 10% to 12% example
If a rate moves from 10% to 12%, two true statements sit next to a false one. The additive gap is 2 percentage points. Relative to the old rate, that is a 20% increase because (12 − 10) / 10 × 100 = 20. It is not a 2% increase.
percentage-point change = new percent − old percent
- 10% to 12% is +2 percentage points.
- That same move is a 20% increase of the original rate.
- Calling it a 2% increase understates the relative change by a factor of ten.
Measure the relative change with the percentage change calculator
When to say percentage points
Use percentage points when both numbers are already percents and you are subtracting them. Election shares, interest rates, unemployment rates, and tax rates are the usual cases. Use percent when you are scaling a quantity that is not already a percent, or when you want relative change.
Basis points
One percentage point equals 100 basis points. A rate that moves from 3.25% to 3.50% rose by 0.25 percentage points, or 25 basis points. Basis points keep small rate changes readable without extra decimals.
| From | To | Percentage points | Relative change |
|---|---|---|---|
| 10% | 12% | 2 points | 20% increase |
| 50% | 65% | 15 points | 30% increase |
| 8% | 6% | −2 points | 25% decrease |
Related reading
Percentage-point questions
Only if the starting rate is 100%. From 10% to 12% the point change is 2 and the relative change is 20%.
One percentage point is 100 basis points. A 0.50% rate move is 50 basis points.
Use percentage change if you want the 20% relative increase. Subtract the two percents yourself if you only need the 2-point gap.
Everyday “15% off” is a percent of the price, not a percentage-point statement. Percentage points show up when two rates are compared.
Yes. A rate that falls from 8% to 6% dropped by 2 percentage points, which is a 25% decrease of the original rate.