NumberTally How to Calculate Percentage Increase
By NumberTally Tools · Updated October 2026 · 8 min read
From pay raises to rent hikes to investment returns, "percent increase" is one of the most-used calculations in daily life — and one of the most commonly done wrong.
The formula is short, but the key detail is what you divide by. Get that right and the rest is easy.
The percentage increase formula
The critical rule: always divide by the old (starting) value, never the new one.
Worked examples
Pay raise: $20/hour → $23/hour. (23 − 20) ÷ 20 × 100 = 3 ÷ 20 × 100 = 15% raise.
Worked example
Rent hike: $1,200 → $1,350. (1,350 − 1,200) ÷ 1,200 × 100 = 150 ÷ 1,200 × 100 = 12.5% increase.
Investment: $5,000 → $6,200. (6,200 − 5,000) ÷ 5,000 × 100 = 24% gain.
Increase vs. decrease — and percentage points
For a decrease, the same formula gives a negative number: $50 → $40 is (40 − 50) ÷ 50 × 100 = −20%.
Watch out for percentage points: going from 10% to 15% interest is a 5 percentage point rise, but a 50% relative increase. News headlines mix these up constantly — now you will spot it.
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Frequently asked questions
How do you calculate percentage increase?
Subtract the old value from the new value, divide by the old value, and multiply by 100. Formula: (New − Old) ÷ Old × 100.
What is the difference between percent and percentage points?
A move from 10% to 15% is 5 percentage points, but a 50% relative increase. Percentage points measure the raw gap; percent measures the relative change.
How do I calculate a pay raise percentage?
Divide the raise amount by your old pay and multiply by 100. A $3 raise on $20/hour is 3 ÷ 20 × 100 = 15%.