In simple terms

A percentage point is the unit for the gap between two percentages. You find it by simple subtraction: a rate that moves from 10% to 12% has risen by 2 percentage points.

The term exists to prevent a common mix-up. That same move from 10% to 12% is also a 20% increase, because 2 is one fifth of 10. Both statements are true, but they describe different things.

How it works

There are two ways to describe a change in a rate:

• Percentage points: subtract the old rate from the new one. This is the absolute change.
• Percent change: divide that difference by the old rate, then multiply by 100. This is the relative change.

Statistics agencies use percentage points when they compare two rates. Eurostat, the EU statistics office, reported that in 2022, 85.9% of women and 81.4% of men aged 20 to 24 in the EU had completed upper secondary education. The gap was 4.5 percentage points.

In finance, a percentage point is often split into smaller units: 100 basis points make one percentage point.

Why it matters

The choice of unit can make the same result sound small or large. If infections in a study fall from 2.1% to 1.8%, that is a drop of 0.3 percentage points, or a relative drop of about 14%. Both are correct, so clear reporting says which one it means.

Mixing the two up can mislead people about interest rates, unemployment, election polls and health risks.

Where you’ll see it

• Central bank decisions and loan rates.
• Unemployment and inflation reports.
• Election results and opinion polls.
• Health studies that compare risks between groups.

Example

Unemployment fell from 6.5% to 5.9%, a drop of 0.6 percentage points.

Often confused with

Percent change. A tax rate that moves from 20% to 25% rises by 5 percentage points, but that is a 25% increase in the rate itself.

Editorially reviewed by Specialty Digest Editorial TeamLast reviewed September 11, 2026Researched and drafted with AI assistanceReport an issue