How to Calculate Percentage Change: Increase and Decrease
Learn what percentage change measures, the simple formula that handles both increases and decreases, and how to apply it in real-world situations.
What Percentage Change Actually Measures
Percentage change tells you how much a value has increased or decreased relative to its original value, expressed as a percentage. It puts changes in context — a $10 price increase on a $20 item is very different from a $10 increase on a $2,000 item, even though both are the same dollar amount.
You see percentage change constantly in everyday life: stock market movements, price inflation, population growth, test score improvements, weight loss progress, and salary increases. The formula is the same in every case.
A positive percentage change indicates an increase. A negative percentage change indicates a decrease. The direction is built into the sign of the result, so one formula handles both cases.
The Formula Made Simple
The percentage change formula is: subtract the original value from the new value, divide by the original value, then multiply by 100. Written as an equation: percentage change equals (new value minus original value) divided by original value, times 100.
The key is always dividing by the original value, not the new value. The original value is your reference point — the thing you are measuring change relative to.
If the result is positive, the value increased. If negative, it decreased. The number tells you by what percentage.
Calculating a Percentage Increase
A product costs $40 last month and $52 this month. Subtract old from new: $52 minus $40 equals $12. Divide by the original: $12 divided by $40 equals 0.30. Multiply by 100: 0.30 times 100 equals 30. The price increased by 30%.
Another example: a salary increases from $65,000 to $72,000. The change is $7,000. Divided by $65,000 gives 0.1077. Multiplied by 100 gives 10.77%. The salary increased by approximately 10.8%.
When communicating increases, rounding to one decimal place is usually sufficient for clarity. A 10.769% increase is accurately communicated as approximately 10.8% without losing meaningful information for most purposes.
Calculating a Percentage Decrease
A restaurant meal cost $60 last year and costs $48 this year (after a promotion). The change is $48 minus $60, which equals negative $12. Divided by $60 equals negative 0.20. Times 100 equals negative 20. The price decreased by 20%.
The formula automatically produces a negative number for decreases, which is correct. You do not need to rearrange anything — simply report the negative result as a decrease, or express it as a 20% decrease without the negative sign when the context makes the direction clear.
Weight loss example: starting weight of 185 pounds, current weight of 162 pounds. Change is 162 minus 185, which equals negative 23. Divided by 185 equals negative 0.1243. Times 100 equals negative 12.43%. The weight decreased by approximately 12.4%.