General · February 5, 2026 · 4 min read
A Simple Guide to Calculating Percentages (No Math Anxiety)
Percentages show up constantly in everyday decisions — discounts, tips, raises, interest rates — but the three most common types of percentage questions are often confused with each other. Here's how to tell them apart and calculate each correctly.
Type 1: Finding a percentage of a number
This answers: "What is X% of Y?" — for example, calculating a 20% tip on a $60 bill. The formula is straightforward: convert the percentage to a decimal (divide by 100), then multiply by the number. 20% of $60 is 0.20 × 60, which equals $12.
Type 2: Finding what percentage one number is of another
This answers: "A is what percent of B?" — for example, figuring out what percentage of your income goes toward rent. Divide A by B, then multiply by 100 to express it as a percentage. If rent is $1,200 and income is $6,000, that's (1,200 ÷ 6,000) × 100, which equals 20%.
Type 3: Calculating percentage change
This answers: "What's the percentage increase or decrease from one number to another?" — commonly used for raises, price changes, or investment growth. Subtract the original value from the new value, divide by the original value, then multiply by 100.
Going from a $50,000 salary to $55,000 is a change of $5,000, divided by the original $50,000, times 100 — a 10% increase.
A common point of confusion: percentage points vs. percentage change
If an interest rate goes from 5% to 6%, that's a 1 percentage point increase, but a 20% relative increase (since 1 is 20% of the original 5). These two ways of describing the same change can produce very different-sounding numbers, so it's worth being precise about which one is being discussed.
Putting it together
Suppose an item originally priced at $80 is on sale for $60. The discount amount is $20. As a percentage of the original price, that's (20 ÷ 80) × 100, which equals 25% — a 25% discount, calculated using the percentage-of-a-number logic applied in reverse.
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Published February 5, 2026. This article is for general informational purposes only — read our disclaimer.