To convert decimal odds to an implied probability, divide 1 by the price:
probability = 1 ÷ decimal odds. Decimal 2.50 implies 40%.
That is the whole formula. Decimal 2.00 implies 50%, 1.25 implies 80%, and 4.00 implies 25%. Shorter odds mean a higher implied chance, because a smaller payout multiple is the market saying an outcome is more likely. Going the other way is the same operation inverted: decimal odds = 1 ÷ probability, so a 40% chance is priced at 2.50.
Two things people get wrong with it.
The result is not the true probability. It is the probability implied by that price, and every real price has a margin built into it. Convert both sides of a two-way market and they will sum to more than 100% — around 104.76% on a standard pair — which means each raw figure overstates its outcome's real chance a little. Recovering an honest number takes a second step, de-vigging.
Decimal odds include the stake. A decimal price of 2.50 returns 2.5 times the stake in total, not 2.5 times in profit. This is the main difference from fractional odds, where 3/2 describes the profit alone and the same price is written 2.50 in decimal. It also explains why decimal odds can never be 1.00 or below: a price of 1.00 returns exactly the stake, so it pays nothing, and 1 ÷ 1 = 100% is a certainty rather than a price.
The other formats convert the same way with different arithmetic: American odds use 100 ÷ (odds + 100) for a positive price and odds ÷ (odds + 100) for a negative one, and fractional odds use denominator ÷ (numerator + denominator). For worked examples across all three, see how to convert odds to implied probability.