Percentage Points vs. Percent: Don't Get Confused

If you've ever heard a news reporter say "Interest rates rose by 1 percent," you've probably encountered one of the most common statistical errors. In many cases, what they actually meant was "one percentage point."

What is a Percentage Point?

A percentage point is the arithmetic difference between two percentages. It is an absolute measure.

What is a Percent?

A percent is a relative measure of change. It describes the ratio of the change to the original value.

The "1% vs. 1 Percentage Point" Example

Imagine your savings account currently pays 5% interest. The bank announces the rate will increase to 6%.

• The increase is 1 percentage point (6 - 5 = 1).
• The increase is 20 percent (1 / 5 = 0.20 or 20%).

Why This Distinction Matters

Confusion between these two terms can lead to massive misunderstandings in politics, finance, and science. If a tax rate of 10% is increased by "10 percent," the new rate is 11%. If that same tax rate is increased by "10 percentage points," the new rate is 20%.

One is a small nudge; the other is a massive doubling of the tax!

Interpreting Polling Data

In election coverage, if a candidate's lead grows from 45% to 50%, they have gained 5 percentage points, but their total support has grown by about 11.1 percent.

Using the Right Tools

To calculate the absolute difference between two percentages without getting confused, use our Percentage Points Calculator. It handles the math for you and provides clear definitions to ensure you always use the correct terminology.