Engagement rate measures how many people acted on a post — liking, commenting, sharing, saving or clicking — as a percentage of the audience that saw it. The most common formula is total engagements divided by reach (or by impressions, or by followers), multiplied by 100. Because the denominator varies, always state which base you used when you compare numbers across accounts or tools.
It matters because it normalises performance across posts of different sizes. A post that reaches 500 people and earns 50 interactions (10%) is often working harder than one that reaches 50,000 and earns 500 (1%). Most platform ranking systems treat early engagement, especially saves and shares, as a signal to show a post to more people.
To improve it, lead with a strong hook, ask one clear question, and give people a concrete reason to save or share. Post when your audience is actually online and measure by format so you can do more of what earns interaction, not just reach.