In Excel number formats tell your spreadsheet what data you're using. Use custom number formatting in Excel to improve spreadsheets.

### Using number formats correctly

There's more to number formatting than selecting cells and applying a format. Spreadsheets can actually apply a lot of number formatting **automatically** based on the way you enter data. This means you'll need to enter data in a way the program can understand, and then ensure that those cells are using the proper number format. For example, the image below shows how to use number formats correctly for dates, percentages, and times:

Now that you know more about how number formats work, we'll look at a few different number formats in action.

### Percentage formats

One of the most helpful number formats is the **percentage** (%) format. It displays values as percentages, such as **20%** or **55%**. This is especially helpful when calculating things like the cost of sales tax or a tip. When you type a percent sign (%) after a number, the percentage number format will be be applied to that cell **automatically**.

As you may remember from math class, a percentage can also be written as a **decimal**. So 15% is the same thing as 0.15, 7.5% is 0.075, 20% is 0.20, 55% is 0.55, and so on. You can review this lesson from our Math tutorial to learn more about converting percentages to decimals.

There are many times when percentage formatting will be useful. For example, in the images below, notice how the **sales tax rate** is formatted differently for each spreadsheet (5, 5%, and 0.05):

As you can see, the calculation in the spreadsheet on the left didn't work correctly. Without the percentage number format, our spreadsheet thinks we want to multiply $22.50 by 5, not 5%. And while the spreadsheet on the right still works without percentage formatting, the spreadsheet in the middle is easier to read.