Percentage Math for Discounts, Tips, Markups and Splits

Percentages show a part of one hundred. The same basic idea appears in sales, tips, taxes, markups, changes, commissions and everyday comparisons.

Finding a percentage of a number

To find 20 percent of 80, convert 20 percent to 0.20 and multiply by 80. The result is 16. This is the relationship used in many tip, tax, commission and discount calculations.

A discount and the final price are not the same number

A 25 percent discount on a $100 item is $25. The final price before any additional taxes or fees is $75. When using a discount calculator, check whether the highlighted result is the amount saved or the amount paid.

Percentage change needs an original value

Percentage increase or decrease normally compares the difference with the original value. Moving from 80 to 100 is an increase of 20, and 20 divided by the original 80 equals 25 percent. Reversing the direction does not create the same percentage because the denominator changes.

Markup and margin answer different questions

Markup compares profit to cost, while profit margin compares profit to selling price. A business can therefore have a 50 percent markup without having a 50 percent margin. Use the metric that matches the decision you are making.

Splitting a bill may require unequal percentages

An even split divides the total by the number of people. A percentage split allocates different shares. If one person pays 60 percent and another pays 40 percent, the shares should add to 100 percent unless part of the bill is intentionally unassigned.

Related calculators

Percentage calculations are simple once the base value is clear. Always identify what the percentage is being measured against.