Pressure Altitude
Pressure altitude is the altitude the airplane would indicate with the altimeter set to 29.92 inHg. Pilots use it as a common atmospheric reference for performance calculations.
Quick calculation
If the altimeter setting is below 29.92, pressure altitude is higher than field elevation. If the setting is above 29.92, pressure altitude is lower.
Example
At a 1,000 ft field with an altimeter setting of 29.42, the pressure correction is about +500 ft, giving a pressure altitude of about 1,500 ft.
Why it matters
Pressure altitude is one input in density-altitude and aircraft performance work. For an actual flight, use the current altimeter setting and the aircraft manufacturer's approved performance information rather than treating this shortcut as aircraft performance data.
A 2,500-foot airport at two pressure settings
At a 2,500-foot airport with an altimeter setting of 30.12, the setting is 0.20 inHg above standard. The quick estimate subtracts about 200 feet, giving roughly 2,300 feet pressure altitude. With an altimeter setting of 29.72, the setting is 0.20 below standard, so the quick estimate adds about 200 feet and gives roughly 2,700 feet.
A quick sign check
Lower pressure should produce a higher pressure altitude, and higher pressure should produce a lower pressure altitude. If your answer moves the other way, check the subtraction before using it. For aircraft performance planning, use the pressure-altitude method and corrections specified by the current POH or AFM.
Pressure altitude versus indicated altitude
Indicated altitude is what the altimeter shows after you set the local altimeter setting. Pressure altitude uses the standard 29.92 inHg reference instead. That standard reference is why pressure altitude is useful in performance calculations: it gives the aircraft performance chart a common pressure datum. When the local pressure is lower than standard, pressure altitude rises above field elevation; when local pressure is higher, pressure altitude falls below it.
References
See the FAA Pilot's Handbook of Aeronautical Knowledge and PilotDesk Sources & Methods.