Percentage Increase vs Percentage Points: The Difference Matters

News headlines mix these up constantly — and the difference can make a small change sound huge (or the reverse).

News headlines mix these up constantly — and the difference can make a small change sound huge (or the reverse).

Percentage points = simple subtraction

If a tax rate rises from 10% to 12%, it rose by 2 percentage points. You're just subtracting one percentage from another.

Percentage increase = relative change

That same rise, 10% → 12%, is a 20% increase in the tax itself (2 ÷ 10 × 100). Both statements are true; they answer different questions.

How to not get fooled

1. Ask: "percent of what?" If the answer is the original value, it's a relative change.
2. If two percentages are being compared directly, the honest unit is percentage points.
3. A "50% increase" on a tiny base can still be tiny — 2 sales becoming 3 sales is +50%.

Use mode 3 of the calculator above for relative change, and plain subtraction for percentage points.