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
| Priority | How to apply it |
|---|---|
| Main driver | The denominator must be the starting value. |
| Downside risk | A rise followed by the same percentage fall does not return to the start. |
| Verification point | Percentage 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 calculator method — The related percentage tool applies the original-value denominator to increases and decreases.
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.