Percentage Points vs. Percent
When both numbers are already percentages, there are two ways to describe the change. This shows both.
Percentage-point change = 4 − 3 = +1 percentage pointRelative change = +1 ÷ 3 × 100 = +33.3333%In basis points: +100 bps
The difference, in one example
A savings rate rises from 3% to 4%. It went up by 1 percentage point, and it is also 33.33% higher than before (1 ÷ 3 × 100). Both statements are true; they answer different questions. Headlines that say “rates rose 1%” are ambiguous: they could mean either.
Examples
| Change | Percentage points | Relative change | Basis points |
|---|---|---|---|
| 3% → 4% | +1 | +33.333% | +100 |
| Interest rate 5.25% → 5.50% | +0.25 | +4.762% | +25 |
When to use which
- Percentage points for the change in any rate or share: interest rates, unemployment, vote share, conversion rates, tax rates.
- Relative percent change when the size of the change relative to its starting level matters, for example a conversion rate going from 2% to 3% is a 50% improvement in sales from the same traffic.
- Basis points in finance, where changes are often a fraction of a point.
For changes in ordinary quantities (prices, counts, revenue), percentage points don’t apply: use the percent change calculator.
Frequently asked questions
What is a percentage point?
A percentage point is the simple arithmetic difference between two percentages. Going from 3% to 4% is a rise of 1 percentage point.
What is the difference between percent and percentage points?
Percentage points measure the absolute gap between two percentages. Percent measures the relative change. From 3% to 4% is +1 percentage point but a 33.33% relative increase.
What is a basis point?
One basis point is one hundredth of a percentage point (0.01%). An interest rate rising from 5.25% to 5.50% has risen by 25 basis points, or 0.25 percentage points.
Which one should I report?
Use percentage points for the change in a rate (interest rates, unemployment, vote share, conversion rates). Add the relative percent change only if it helps, and label it clearly.