Percentages are the most common piece of maths in everyday life, from discounts and pay rises to interest rates and statistics in the news. They're also easy to get wrong in ways that feel right. Here are four mistakes that catch almost everyone, each with a worked example you can check in the calculators on this page.
1. A percentage rise and fall don't cancel out
If a price rises by 20% and then falls by 20%, it doesn't end up where it started. Take a £100 item. A 20% rise makes it £120. A 20% fall from £120 takes off £24, leaving £96. The fall is applied to a bigger number, so it removes more. The same thing happens with investments: a portfolio that falls 50% needs to rise 100%, not 50%, to get back to where it was.
2. Percent and percentage points are different
When an interest rate rises from 4% to 5%, it has gone up by one percentage point. But as a percentage of the old rate, it has risen by 25%, because one is a quarter of four. Both statements are true, and news headlines often choose whichever sounds more dramatic. When you compare rates, mortgage deals or survey results, check which one is being used.
3. You can't simply average percentages
Suppose you scored 90% on a 10-question quiz and 60% on a 40-question quiz. The average of the two percentages is 75%, but your overall score is lower. You got 9 of the first 10 and 24 of the second 40, so 33 out of 50 overall, which is 66%. The bigger quiz carries more weight. Whenever groups are different sizes, combine the underlying numbers before you work out a percentage. The average calculator can help with weighted averages.
4. Removing VAT isn't the same as taking off 20%
UK VAT is usually charged at 20%, so a £120 price including VAT has a net price of £100. But 20% of £120 is £24, and £120 minus £24 is £96, which is wrong. The correct method is to divide by 1.2, because the VAT was added to the net price, not the gross one. The same rule applies to reversing any percentage increase: divide by one plus the rate, rather than subtracting the rate. The percentage calculator does this for you and shows the working.
Why these matter
Each of these mistakes can lead to a real decision going wrong: overestimating a recovery, misreading a rate change, misjudging a result, or setting the wrong price on an invoice. The fix in every case is the same. Ask what the percentage is a percentage of, and do the calculation on the underlying numbers when in doubt. The calculators on this page show their working, so you can see each step rather than trusting a single answer.