Percentile is a ranking metric, not a scoring metric. A student's percentile tells you what percentage of the test-taking population they outperformed. It is heavily used in entrance exams (JEE, NEET, CAT, GMAT, GRE) precisely because it adjusts for variations in test difficulty year-to-year — a 99th percentile rank means the same thing regardless of whether the absolute cut-off was 230 or 270.
Mathematically:
Percentile = (Number of candidates with marks below you ÷ Total candidates) × 100
Some exams use a "normalised percentile" (JEE Main does this) that accounts for multiple session shifts of the same exam. Each shift is converted to a percentile independently so candidates from different shifts can be compared directly.
A frequent error: confusing percentile with percentage. A student scoring 60% might still be in the 99th percentile if 99% of other candidates scored even lower. Conversely, scoring 90% in a CBSE board exam now lands roughly in the 75th-80th percentile band — high absolute marks are common, so relative ranking has shifted down.
For admission decisions, percentile usually matters more than percentage. NEET cut-offs, IIT-JEE All India Ranks, and CAT-based MBA admissions all use percentile thresholds.