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Money guide

Percentage Increase Formula Guide

Percentage increase compares the change with the original value: (new − original) ÷ original × 100.

Updated 16 October 2026 • Reviewed by Tools by Layna Editorial Team • General information only

The straight answer

Percentage increase compares the change with the original value: (new − original) ÷ original × 100.

What matters most

PriorityHow to apply it
Main driverThe denominator must be the starting value.
Downside riskA rise followed by the same percentage fall does not return to the start.
Verification pointPercentage points and percentage change are different.

How to calculate a percentage increase

Start with the original value. Subtract it from the new value, divide the difference by that original value, then multiply by 100.

Percentage increase = ((new − original) ÷ original) × 100. For example, a price rising from $80 to $100 increases by ($20 ÷ $80) × 100 = 25%. If you divide by the new price instead, you get 20%, which answers a different question.

If the original value is zero, the usual percentage increase formula is undefined. Report the absolute difference instead.

Worked example

An increase from $80 to $100 is $20 ÷ $80 = 25%, not 20%.

Percentage change versus percentage points

If a savings rate changes from 4% to 5%, the change is 1 percentage point, but it is a 25% relative increase (1 ÷ 4 × 100). Treating these two descriptions as interchangeable can mislead readers.

For a pay rise, compare gross with gross or after-tax with after-tax over the same period. An increase in annual salary does not produce exactly the same percentage change in take-home pay when marginal tax or withholding is involved.

Common mistakes

  • Treating percentage increase formula guide as settled after one calculation or one short observation.
  • Ignoring the page’s main limitation: A rise followed by the same percentage fall does not return to the start.
  • Changing course before checking this review signal: Percentage points and percentage change are different.
  • Choosing the most attractive headline figure while ignoring cash flow, fees, timing or the cost of being wrong.

Sources and method notes

Related calculators and guides

Keep a clear calculation record

Record the original value, new value, measurement unit, time period and whether each figure includes tax. For a sale price changing from $120 to $150, the dollar difference is $30 and the percentage increase is 25%. Both numbers matter: the percentage tells you the relative movement, while the dollar difference tells you the actual cost.

A 20% rise followed by a 20% fall

Starting at $100, a 20% rise takes the price to $120. A 20% fall from $120 takes it to $96, not $100. The second percentage is applied to a different base ($120 rather than $100). To return from $120 to $100 requires a fall of 16.67%.

Quick formula checks

  • Original $50; new $60 → 20% increase.
  • Original $80; new $100 → 25% increase.
  • Original $100; new $80 → 20% decrease, not an increase.
  • Original $0; new $20 → $20 increase, percentage change undefined.

If you need to compare more scenarios, use the percentage calculator or the pay rise calculator for salary-specific results.

Frequently asked questions

Why is a rise from 80 to 100 a 25% increase?

The increase is 20 and the starting value is 80. Divide 20 by 80 and multiply by 100: the result is 25%.

Does a 20% rise followed by a 20% fall cancel out?

No. Starting at 100, the rise gives 120 and the fall then removes 24, leaving 96. The second percentage uses a different base.

What is the difference between percent and percentage points?

A rate rising from 10% to 12% has increased by 2 percentage points. Relative to the original 10%, that is a 20% increase.

Bottom line

Percentage increase compares the change with the original value: (new − original) ÷ original × 100. Use percentage increase formula guide to compare scenarios and expose the assumption doing the most work. Verify current rates, fees, GST treatment and contract terms before committing.