Percentage Point Calculator
Percentage points represent the arithmetic difference between two percentages. Unlike percentage change, which shows a relative difference, percentage points show the absolute difference between two percentage values.
For example, if an interest rate increases from 2% to 5%, we say it increased by 3 percentage points. This is different from saying it increased by 150% (the relative percentage change).
Percentage Points (Absolute Change)
Percentage points measure the absolute arithmetic difference between two percentages. If something increases from 40% to 50%, that's a 10 percentage point increase.
Percentage Change (Relative Change)
Percentage change measures the relative difference between two values. In the same example (40% to 50%), that's a 25% increase because 50% is 25% more than 40%.
Interest Rates
When the Federal Reserve raises interest rates from 2% to 2.5%, it's described as a 0.5 percentage point increase, not a 25% increase (which would be the relative change).
Election Results
If a candidate's approval rating changes from 45% to 48%, we say it increased by 3 percentage points, not by 6.67% (the relative change).
Market Share
When a company's market share grows from 20% to 25%, that's a 5 percentage point increase, distinct from the 25% relative increase in their share.
Financial Reporting
Use percentage points when discussing changes in interest rates, profit margins, or market share to avoid confusion and maintain clarity in financial communications.
Statistical Analysis
When comparing survey results or demographic changes over time, percentage points provide a clearer picture of absolute changes in proportions.
Policy Discussion
Changes in tax rates, unemployment rates, or other policy-related metrics are typically expressed in percentage points to avoid misinterpretation.