What is percentage?
A percentage is a way of showing a number as parts out of 100. It is used for discounts, VAT, tips, price changes, pay rises and everyday comparisons.
A percentage means “out of 100”. For example, 25% means 25 out of every 100, which is the same as 0.25 or one quarter.
Percentages are useful because they turn different numbers into a common scale. That makes it easier to compare prices, savings, tax, growth, falls and shares of a total.
How percentages work
A percentage is usually calculated by dividing one number by another, then multiplying by 100.
Percentage = part ÷ whole × 100For example, if 30 people out of 150 choose an option, the percentage is 30 ÷ 150 × 100 = 20%.
Calculate a percentage quickly
Use the percentage calculator for percentage of, percentage change, difference, add percentage and subtract percentage sums.
Common percentage examples
Percentages can describe a share of a total, a change from one number to another, or an amount added to or removed from a price.
Percentage change
Percentage change compares an old value with a new value. It is often used for pay rises, price increases, bill changes and savings.
Percentage change = (new value − old value) ÷ old value × 100If a price rises from £100 to £120, the increase is £20. £20 ÷ £100 × 100 = 20% increase.
This is different from percentage points, which describe the direct gap between two percentages.
Percentages in VAT and discounts
VAT and discounts both use percentages, but they do not always work in the same direction.
| Use case | Example | Important point |
|---|---|---|
| Add VAT | £100 + 20% VAT = £120 | The VAT is calculated from the net price. |
| Remove VAT | £120 ÷ 1.20 = £100 net | Do not simply subtract 20% from the gross price. |
| Discount | £80 with 25% off = £60 | The discount is removed from the original price. |
For UK VAT, the main rates are 20%, 5% and 0%, but whether VAT applies depends on the goods or services involved.
Common percentage mistakes
- Confusing percentage increase with percentage difference.
- Removing VAT by subtracting 20% instead of dividing by 1.20.
- Adding stacked discounts together instead of applying them one after another.
- Mixing up percentage points with percent change.
- Rounding too early when working with money.
When using money values, calculate first, then round the final answer to 2 decimal places unless you need a more precise result.
Percentage FAQs
What does percentage mean?
Percentage means a number shown as parts out of 100. For example, 40% means 40 out of 100.
How do you calculate a percentage?
Divide the part by the whole, then multiply by 100. For example, 25 out of 200 is 25 ÷ 200 × 100 = 12.5%.
Is 20% off the same as removing 20% VAT?
No. A 20% discount is subtracted from the original price. Removing 20% VAT from a VAT-inclusive price means dividing the gross price by 1.20.
What is the difference between percent and percentage points?
Percent describes a relative change or share. Percentage points describe the direct difference between two percentages, such as 10% to 15% being a 5 percentage point rise.