The short explanation
Percentage points measure the direct gap between two percentages. Percent change measures that gap relative to the original percentage.
Percentage-point change
New rate minus old rate.
Percent change
Difference divided by the old rate, then multiplied by 100.
The classic example: 20% becomes 25%
Percent increase: (25 − 20) ÷ 20 × 100 = 25%
Answer: the rate rose by 5 percentage points, which is a 25% increase relative to its old level.
What a percentage point means
A percentage point is one unit on the percentage scale. It is used when the numbers being compared are already percentages. Moving from 52% to 55% is a rise of 3 percentage points. Moving from 7% to 5% is a fall of 2 percentage points.
No division is needed. The word “point” signals that you are reporting an arithmetic difference between rates rather than a relative change.
What percent change means
Percent change answers a different question: how large is the movement compared with the original rate? The original rate becomes the denominator.
If a survey result moves from 40% to 50%, the direct change is 10 percentage points. Relative to the original 40%, that 10-point movement is a 25% increase.
Worked example: approval moves from 40% to 50%
Relative change: 10 ÷ 40 × 100 = 25%
Both descriptions are correct, but they communicate different scales.
Why the distinction matters
Leaving out “percentage points” can make a change sound larger or smaller than it is. Suppose an interest rate rises from 2% to 3%. The direct increase is only 1 percentage point, but it is a 50% increase relative to the old 2% rate.
Neither statement is automatically better. Percentage points are often clearest when readers care about the new level of a rate. Percent change is useful when readers care about growth relative to the old level. Good writing names which one is being used.
Worked examples in context
Conversion rate: 4% to 5%
Relative change: 1 ÷ 4 × 100 = 25%
A dashboard could accurately report either “up 1 percentage point” or “up 25%.” The first emphasizes the absolute rate movement; the second emphasizes relative growth.
Defect rate: 8% to 6%
Relative change: (6 − 8) ÷ 8 × 100 = −25%
The defect rate fell by 2 percentage points, a 25% decrease from its former level.
Discount: 30% to 45%
Relative change: 15 ÷ 30 × 100 = 50%
The discount is 15 percentage points deeper and is 50% larger than the original discount rate.
Percentage points and basis points
Finance often uses basis points for small changes in interest rates, yields and fees. One basis point equals 0.01 percentage point. Therefore, 100 basis points equal 1 percentage point.
Worked example: 4.25% to 4.50%
0.25 × 100 = 25 basis points
The rate rose by 25 basis points. Relative to 4.25%, it rose by about 5.88%.
Common wording mistakes
Saying “up 5%” when you mean five points: a move from 10% to 15% is 5 percentage points but a 50% relative increase. Using percent change with a zero starting rate: relative change is undefined because division by zero is impossible, although the point change remains clear. Dropping the baseline: “increased by 20%” should identify what the new rate is being compared with.
Try it: use the free percentage change calculator for instant results.