Use percentage change for metrics measured in dollars or units: revenue going from $80,000 to $92,000 is up $12,000, or 15.0%. Use percentage points (pp) for metrics that are already percentages: gross margin going from 40.0% to 45.0% is up 5.0 pp. The same margin move is also a 12.5% relative increase. Both numbers are correct, but they answer different questions, so label which one you’re reporting.
The label matters because people do arithmetic with what you report. If a report says “gross margin rose 12.5%,” a reader can add 12.5 to 40 and expect a 52.5% margin. On May’s $92,000 of sales, that reading overstates gross profit by $6,900.
Level Metrics and Rate Metrics
Before you write a variance formula, decide what kind of number the row holds.
- Level metrics are counts or amounts: revenue, orders, units, headcount. Report the absolute change and the relative percentage change.
- Rate metrics are already percentages: gross margin, conversion rate, churn, discount share. Lead with the percentage-point change and state both rates. Add the relative change if it helps, and call it “relative.”
The UK Office for National Statistics style guidance on percentages draws the same line: a percentage point is the difference between percentages.
Here is a four-row example scorecard for April and May 2026. Enter it on a sheet named Scorecard with headings in A1:G1 and the metrics in rows 2 to 5. Store the rates in C3:D5 as decimals (0.40, 0.45, and so on) formatted as percentages.
Column F means the same thing on every row. Column E holds dollars on row 2 and percentage points on rows 3 to 5. Column G is typed text, written the way you’d say it in a meeting. Percentage points never apply to revenue: $80,000 to $92,000 is 15%, not “15 points.”
Three Ways the Mix-Up Costs You
1. The phantom margin
April’s margin was 40.0%, or $32,000 of gross profit on $80,000. May’s margin is 45.0%, so May’s actual gross profit is $92,000 × 45.0% = $41,400.
Now suppose the report says only “margin up 12.5%.” A reader who adds that to 40.0% expects 52.5%, and $92,000 × 52.5% = $48,300. That’s $6,900 of gross profit that doesn’t exist: a 7.5-point misreading applied to $92,000 of sales. The 12.5% figure was accurate. It just lacked a label and the underlying rates.
2. The small-base conversion jump
Quote-to-close conversion moved from 2.0% to 3.0%. That’s +1.0 pp, and also +50.0% relative. Both are true: the business closes 50% more deals per quote. But “conversion up 50%” on its own can push revenue forecasts and marketing budgets further than one extra close per 100 quotes supports. Report it as “up 1.0 pp, from 2.0% to 3.0% (+50.0% relative).”
3. The asymmetric base
Suppose discount share rises from 20.0% to 25.0%, then falls back to 20.0%. In percentage points, that’s +5.0 pp and then -5.0 pp, and the two cancel. In relative terms, it’s +25.0% and then -20.0%, because the first change divides by 0.20 and the second by 0.25. Without the rates, those two figures look like a net gain.
How to Calculate and Format Percentage Points in Excel and Google Sheets
Step 1: Calculate the dollar change for the level row. In E2:
=D2-C2
Format E2 as currency. A signed format such as +$#,##0.00;-$#,##0.00;$0.00 shows +$12,000.00.
Step 2: Calculate the percentage-point change for the rate rows. In E3, then fill down to E5:
=(D3-C3)*100
Subtracting 0.40 from 0.45 gives 0.05, and multiplying by 100 stores it as 5, in point units. If you write only =D3-C3, the cell usually picks up the percentage format and displays 5.0%, which looks exactly like a relative change.
Step 3: Format E3:E5 with a pp label. In desktop Excel, press Ctrl+1 (Cmd+1 on a Mac), choose Number > Custom, and enter the format below. In Excel for the web, open Home > Number Format > More Number Formats, then choose Custom. Enter the code and select Confirm. If your web version does not offer Custom, use desktop Excel or Google Sheets. In Google Sheets, use Format > Number > Custom number format.
+#,##0.0" pp";-#,##0.0" pp";0.0" pp"
The cells now read +5.0 pp, +1.0 pp, and -5.0 pp. Apply this format only to E3:E5, not the revenue row. Each cell still holds a number, so you can sort by it or reuse it, but it’s in points: divide by 100 before combining it with a decimal rate. Don’t total pp changes across unrelated KPIs. Margin points plus conversion points don’t measure anything.
Step 4: Calculate the relative change for every row. In F2, then fill down to F5:
=(D2-C2)/C2
Format F2:F5 with +0.0%;-0.0%;0.0%. Keep formulas at full precision and round only in the display format.
If a starting value can be zero, relative change has no defined answer, and the formula returns #DIV/0!. Use an IF check to make that outcome explicit:
=IF(C2=0,"N/A (zero base)",(D2-C2)/C2)
The percentage-point formula in column E doesn’t divide, so it still works when a rate starts at 0.0%.
This example assumes positive starting values. With a negative start, such as a loss or a negative margin, the sign of a relative change can point the wrong way, so treat those rows separately.
Basis points for finer moves. One percentage point equals 100 basis points (bps). Multiply the difference by 10,000 instead of 100:
=(D3-C3)*10000
That returns 500 for the margin row. Basis points are common for card fees and interest rates: a processing fee dropping from 2.90% to 2.65% is -0.25 pp (which rounds to -0.3 pp under a one-decimal pp format), or -25 bps. Format a bps column with +#,##0" bps";-#,##0" bps";0" bps", and use the same unit throughout each rate-change column.
Troubleshooting
| What you see | Why | Fix |
|---|---|---|
| The variance column shows 5.0% for a margin that went from 40.0% to 45.0% | If the result cell inherits or uses percentage formatting, =D3-C3 displays 0.05 as 5.0% |
Use =(D3-C3)*100 and the custom pp format in E3:E5 |
#DIV/0! in column F |
The starting value in column C is zero | Use the IF(C2=0, ...) guard; for rate rows, report the pp change |
| The revenue row shows “+12,000.0 pp” | The pp format was applied to E2 | Reapply currency formatting to E2 |
Frequently Asked Questions
Can I report relative change on a conversion rate?
Yes, as long as you label it and show the rates. “Quote conversion rose 1.0 percentage point, from 2.0% to 3.0%, a 50% relative increase” is accurate and useful. “Conversion rose 50%” on its own is the version that gets misread.
When should I use basis points instead of percentage points?
When your audience already uses them, as with fees and interest rates. They’re especially handy for small moves because they avoid decimals: -25 bps reads more easily than -0.25 pp.
What if a rate started at 0.0% and rose to 4.0%?
The change is +4.0 pp. Relative change is undefined because you’d be dividing by zero, so show “N/A (zero base)” in that column instead of a number.
What to Do Next
Mark each row on your scorecard as a level or a rate, then check that every rate row shows a pp change and both rates. For organizing both kinds of metrics on one page, see How to Build a Monthly KPI Scorecard. For the rest of the monthly pack, see A Monthly Reporting Pack Template for Small Business and What to Include in a Monthly Business Report.