How to Add Percentages Together and Percentage Uses

By Indeed Editorial Team

Updated June 10, 2022

Published December 7, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Percentages are a fundamental mathematical concept and are visible widely in stores, stock markets, news reports and advertisements. In math, you can use percentages like decimals and fractions to describe a part of a whole. Understanding the meaning of percentages is vital and might save you time and money, and knowing how to calculate it can also make you more employable. In this article, we discuss how to add percentages, explore percentage change, calculate percentage difference, and discuss its various uses in the workplace with examples.

How to add percentages together

To add percentages together, you can use the following steps:

1. Add percentages to 100

Consider this with an example.

If a store sells a pair of pants for a 15% profit, the pant manufacturer adds 5% on the cost. If the pants supplier is selling them for $200, how much does a customer pay?

First, you add the percentage to 100. Here's how this looks:

15 + 100 = 115%

5 + 100 = 105%

2. Change the percentages to decimals

Using the example above, using the percentages from the first step, you can divide the percentages by 100 or move the decimal to two places to the left. Here's how to do it:

115% / 100 = 1.15

105% / 100 = 1.05

3. Multiply the base value

For this example, you can use the new decimal values in the previous step and multiply the first value to the cost of the pants, which is $200. Here's how to do it:

First, multiply 200 by 1.15.

200 x 1.15 = 230

4. Multiply the second percentage

Keeping with the same example, you can now use the new value, which you calculate in the previous step, to the second percentage, also in its decimal form. Here's how this looks:

230 x 1.05 = 241.50

So, the final cost in this example is $241.50

What is percentage change?

The idea of percent change is something that you might already see in your regular day-to-day activities. Almost every time you see a billboard, a TV commercial, or a store sign advertising a sale, you can see a percent change calculation. Instead of an ad saying, couches are now $700 instead of $1400, it's easier for them to say, couches are now 50% off.

After subtracting the initial value from the new value, the percentage change is the difference and then divided by the old value. You can then multiply the final answer by 100 to show as a percent. Calculating the percent change can be helpful in a variety of applications that you may use in your daily activities, such as sales, finance, tax, and inflation rate.

Related: How to Calculate Growth Percentage (With Examples)

How to calculate percent change

You can use the following steps to calculate percent change:

1. Subtract the initial value from the new value

When calculating a percent increase, the initial value is the smaller number, and the new value is the bigger number. When calculating a decrease, the opposite is true. You can use the formula to calculate an increase or decrease, and you can determine that your change decreases if your answer is a negative number instead of a positive.

For example, say you're trying to determine how much of a salary increase your employer gave you from one year to the next. Last year, your earnings were $37,000, and this year your earnings are $45,000. You can first subtract 37,000 from 45,000, and this gives you 8,000 as a result.

2. Divide the answer by the original value

Once you have found the difference between the two values, you can divide that number by the initial value. If there is a percent increase, the initial value is the smaller number. If there's a percent decrease, the initial value is the bigger number.

Using the above example, you can divide 8,000, which is the difference between the two income values, by 37,000, which is the initial value. This gives you an answer of 0.216.

3. Multiply the answer by 100

Now you can multiply your answer from the previous step by 100 to turn it into a percentage. If the figure has decimals, simply move it two digits towards the right. If it's a whole number, add two zeros.

Using the same example again, multiply 0.216 by 100. This formula gives you an answer of 21.6, which means you have a 21.6% increase in your salary.

Related: What Is a Good Raise Percentage? (And How To Negotiate One)

What is a percentage difference?

Percentage difference can tell you the measurement of two different values when one is larger than the other. You can then divide the difference between the two values by the average of the same two values. The formula for percentage difference is:

[Value one–Value two] / [(Value one + Value 2) / 2] x 100

When determining the percentage difference using this formula, always use the absolute value. This means ignoring the minus sign before any value if it's a negative number, which means if one of your values is -10, ignore the minus and use the value 10.

How to calculate percentage difference

Calculating the percentage difference of two numbers is simple if you use the following steps:

1. Find the difference between two numbers

Consider this with an example:

A local grocery store sells a bag of apples for $5, and another store sells the same bag of apples for $7. You have to find out the percentage difference in the selling price between the two stores. In this step, you can find the difference by subtracting the two values 7 and 5, which gives you 2.

2. Find the average of the same two numbers

To find the average, first, add the values 7 and 5. This gives you an answer of 12. Then you find the sum average, which is 12 / 2, giving you the answer 6.

3. Find the ratio of the difference and average

In the same example, you now have the difference of two values, which is 2. And you also have the average of the two values, which is 6. Find their ratio by dividing them to get 0.3333.

4. Multiply the ratio by 100

You can now take the ratio value and multiply it by 100 to find the percentage difference in this step. 0.3333 x 100 gives you a percentage difference of 33.33%. Now you know the percentage difference of the bag of apples that each store sells is 33.33%.

Using percentages in the workplace

Percentages are useful in a variety of ways in the workplace. This is particularly true for professionals who work in the accounts or finance department or companies. Here are some ways to use percentages in the workplace:

Calculating the sales tax

A computer or cash register is typically what you might use to calculate the sales tax. Sales tax is a percentage that a store adds to the purchase's base value, which results in a new total. The tax depends on the laws and regulations.

For example, if a store charges 8.5% sales tax to a customer, purchasing an item for $1,200. Here is how the store calculates the sales tax and the final price:

Step 1: 8.5 / 100 = 0.085

Step 2: 0.085 x $1,200 = $102, the store charges $102 in sales tax.

Step 3: $102 + $1,200 = $1,302, this is the total sales price after the store adds sales tax.

Computing sales discounts

Businesses can sometimes offer discounts on certain products, or sometimes a vendor can give them a discount. This is a percentage decrease, which involves finding the percentage and subtracting that from the total.

For example, a vendor offers a discount to businesses that pay their bills early or on time. One of their customers is paying a bill for $3,450 in supplies for a 10% discount for paying early:

Step 1: 10 / 100 = 0.1

Step 2: 0.1 x $3,450 = $345, the customer can save $345 for paying their bill early.

Step 3: $3,450 - $345 = $3,105, the customer can pay $3,105 after discount.

Related: How to Calculate Inflation Rate (With Examples)

Determining profit margins

A business can use percentages to determine its profitability. To find the gross profit margin percentage, calculate the profit percentage of the sales revenue. A high percentage can show that the business keeps much of its income as a profit, and a low percentage shows they keep a small amount as profit. For example, a business makes $150,000 in revenue. The business paid $90,000 in supplies and other costs. You can use a percentage formula to calculate the gross profit margin:

Step 1: Determine the business's gross profit, which is $150,000 - $90,000 = $60,000.

Step 2: Divide the gross profit with the sales revenue, which is $60,000 / $150,000 = 0.4.

Step 3: Multiply the end result by 100 to discover the percentage 0.4 x 100 = 40%.

In this example, the business has a gross profit margin of 40%. Prospective investors and other parties interested in the business can now use this percentage to compare the profitability of the business to others.

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