The tolerance of a resistor is the deviation that a resistor may vary from its nominal value resistance, measured at 25°C with no load applied. In other words, the resistor tolerance is the amount by which the resistance of a resistor may vary from its stated value.
The most common way of specifying resistor tolerance is by percentage, which means the amount by which a resistor may vary from its nominal value. Typical resistor tolerances are 1 percent, 2 percent, 5 percent, 10 percent and 20 percent. The value can even be lower than 1 percent with high-precision resistors.
The other way of specifying resistor tolerance is by parts per million (ppm). Parts per million is a method of stating a component's tolerance value by specifying how many parts per million units a component may vary from its nominal value. For example, if we take a 1MΩ resistor which has a ppm value of 20,000, this means that the resistance can vary by 20,000Ω above or below this 1MΩ resistor value. This means the resistance can be between 980,000Ω and 1,020,000Ω. Though parts per million is used less than percentage, it is still often used and thus very useful to know when encountered through datasheets and other electronic manuals and text.
Carbon-composition resistors, as a whole, have the worst tolerance levels, around 5 to 20 percent. Carbon-film resistors are about 1 to 5 percent, metal-film about 1 percent, and precision metal-film resistors as low as 0.1 percent. Most wirewound resistors are from 1 to 5 percent, while precision wirewounds can achieve ±0.005 percent tolerances. Foil resistors can achieve 0.0005 percent. For most general applications, a resistor with a 5 percent tolerance is adequate.