How to Use Percentage Calculations Correctly
Percentages compare a part to a base of 100. The important step is choosing the right base value before calculating, especially for change, discounts, taxes, and comparisons.
Percentage Change
Use percentage change when you know an old value and a new value. The calculator divides the difference by the old value, then multiplies by 100.
Percentage Difference
Use percentage difference when two values are peers. The calculator compares the gap with the average of both values, which keeps the comparison neutral.
Common percentage traps
- A 50% increase followed by a 50% decrease ends at 75%, not 100%, because the second calculation uses a new base.
- Always identify the 100% base before applying a rate.
- To remove 20% tax from a tax-included price, divide by 1.2 instead of subtracting 20%.