Percentage change vs
percentage difference -
they're not the same.
Using the wrong formula in a business report, salary negotiation, or data comparison produces a number that's mathematically incorrect. This page shows you which to use - and what each one actually means.
The key question: is one number the starting point?
This is the single decision that determines which formula to use. Before you calculate anything, ask yourself: is one of these numbers clearly the "before" and the other clearly the "after"?
If yes - one is old, one is new; one is original, one is current; one is last year, one is this year - use percentage change. Direction matters, because the starting point is the base.
If no - both numbers represent the same kind of thing with equal standing, neither is a baseline - use percentage difference. You're comparing two peers, not measuring movement.
The two formulas, side by side
The difference between the formulas is the denominator. Percentage change divides by the starting value. Percentage difference divides by the average of the two values. That difference in the denominator is why the two formulas produce different results from the same pair of numbers.
Percentage change (correct formula here - one value is the starting point):
((62,500 − 50,000) ÷ 50,000) × 100 = (12,500 ÷ 50,000) × 100 = 25% increase.
Percentage difference (wrong formula here - but let's see the number):
(|62,500 − 50,000| ÷ ((62,500 + 50,000) ÷ 2)) × 100 = (12,500 ÷ 56,250) × 100 = 22.2%.
In a salary negotiation or a performance review, 25% is the correct number to use. Your salary increased by 25% of where it started. Using 22.2% understates the move - which might actually work against you if you're presenting past growth to justify a future raise.
Worked examples - the same situation, the wrong choice
Neither price is the "original" - they're two current prices.
Percentage difference (correct):
|720 − 900| ÷ ((720 + 900) ÷ 2) × 100 = 180 ÷ 810 × 100 = 22.2%
Percentage change (if you used Store B as the base):
((720 − 900) ÷ 900) × 100 = −20%
The 20% and 22.2% feel similar but mean different things. The 20% says "Store A is 20% cheaper than Store B." The 22.2% says "the prices are 22.2% different from their average." Use % difference when you're comparing two peers without a baseline.
Q2 is clearly the starting point - Q3 is the "after."
Percentage change (correct):
((110,500 − 85,000) ÷ 85,000) × 100 = 25,500 ÷ 85,000 × 100 = 30% growth
Percentage difference (incorrect):
|85,000 − 110,500| ÷ ((85,000 + 110,500) ÷ 2) × 100 = 25,500 ÷ 97,750 × 100 = 26.1%
Presenting 26.1% as your growth figure would be mathematically wrong. Q2 was the baseline. You grew by 30% on that base.
Percentage difference - because neither city is the "baseline." You're comparing two equal peers.
|55,000 − 72,000| ÷ ((55,000 + 72,000) ÷ 2) × 100 = 17,000 ÷ 63,500 × 100 = 26.8% difference.
Notice that if you use percentage change with City A as the base, you get: ((72,000 − 55,000) ÷ 55,000) × 100 = 30.9%. With City B as the base: ((55,000 − 72,000) ÷ 72,000) × 100 = −23.6%. Three different answers - 26.8%, 30.9%, or 23.6% - for the same two salaries. The formula you choose changes the number significantly. When neither city is a starting point, 26.8% is the honest answer.
Percentage points - the third concept that people mix up with both
When the two values you're comparing are already percentages, there's a third way to express the gap: percentage points. And it's completely different from both of the above.
If the unemployment rate falls from 6% to 4%, that's a drop of 2 percentage points - the simple arithmetic difference. It is also a 33.3% change (percentage change: ((4−6)÷6)×100). And it's a 40% difference (percentage difference using the average of 5%).
These are three mathematically correct ways to describe the same event. They produce very different-sounding numbers. That's why financial journalists and politicians choose carefully which one they report - and why you should notice which one they've chosen.
Both - and they measure different things.
15 percentage points: the raw arithmetic difference between the two scores. 75 − 60 = 15. This tells you the gap in actual score terms.
25% increase: how much your score grew relative to where it started. ((75 − 60) ÷ 60) × 100 = 25%. This tells you the proportional improvement.
In most academic contexts - showing improvement, tracking progress - the percentage change (25%) is more meaningful. It shows you improved by a quarter of your original score, which is a significant gain regardless of what the absolute numbers were. A teacher or employer comparing your improvement to another student's would use the percentage change, not the raw point difference, to make a fair comparison.
Where getting this wrong costs you in real life
Salary negotiations. If you're presenting your growth in earnings to justify a new salary, always use percentage change with your starting salary as the base - not percentage difference. The percentage change gives the higher, more accurate number. "My compensation grew 25%" is correct and stronger than "my compensation is 22.2% different from where it started." These aren't the same number, and the second phrasing uses the wrong formula for the context.
Business reports and board presentations. Revenue growth quarter-on-quarter or year-on-year is percentage change - the earlier period is the base. If you accidentally use percentage difference in a growth report, your numbers will be lower than the correct figure and may raise questions about your methodology. The AP Stylebook, Poynter Institute, and most financial reporting standards specify using percentage change for time-series comparisons.
Scientific and research contexts. If you're comparing two measurements from the same experiment where neither is the reference - like two different calibration methods - use percentage difference. If you're comparing a measured result to a known true value, that's percentage error (the absolute difference divided by the true value). Using percentage change in scientific comparison contexts implies a directionality that doesn't exist. Reviewers and peer readers will notice.
Price comparison journalism and consumer reporting. "Product A costs 20% less than Product B" uses percentage change with Product B as the base. "Product A and Product B differ by 22% in price" uses percentage difference. The first is fine for consumer advice (it gives an actionable direction). The second is more neutral and is preferred in formal reporting. The distinction matters when you're comparing products without implying one is the "correct" price.