How to calculate budget variance percentage in Excel

Q: How do I label over and under budget?

Wrap it in IF: =IF(C2>B2,"Over","Under")&" by "&TEXT(ABS(D2),"0.0%").

Q: How do I highlight variances over 10%?

Use conditional formatting with the rule =ABS($D2)>10%.

Formula (Excel and Google Sheets)

=(C2-B2)/B2

Divide actual minus budget by the budget: =(C2-B2)/B2. Positive means over budget.

Result on the example: one result per row in D2, filled down to D6
Works in: Every current version
Google Sheets: Same formula

See it work

The formula is already in D2, filled down to D6. Change any input and the result updates, or edit the formula to experiment.

How it works

The variance is actual minus budget, and dividing by the budget expresses it as a share of the plan. Marketing spent 3,750 more than its 25,000 budget: 15% over. Travel came in 30% under.

For costs, positive is unfavorable; for revenue lines, positive is good. Label the column so readers know which way is which.

=(C2-B2)/B2

Result-0.015

C2$118,200
The value in C2.
B2$120,000
The value in B2.
C2-B2-1800
The - operator subtracts.
C2-B2)/B2-0.015
The / operator divides.

In Google Sheets

The same formula works in Google Sheets: =(C2-B2)/B2. We ran it in Google Sheets mode on the same data and it returns the same results.

Other ways to do it

Each one was run on the same example sheet.

Formula	Result	When to use it
=C2/B2	98.5%, 115.0%, 70.0%…Different result	Percent of budget used: 115% for Marketing. Shows the share of the budget spent, not the variance.
=(B2-C2)/B2	1.5%, -15.0%, 30.0%…Different result	The opposite sign convention: positive means under budget, as some finance teams prefer for costs. Every sign is reversed.

Common mistakes

A budget of 0 gives #DIV/0!. Use =IF(B2=0,"",(C2-B2)/B2), and explain unbudgeted spending separately.
Don't average the row variances for a total. Use the totals: =(SUM(C2:C6)-SUM(B2:B6))/SUM(B2:B6).

Try it yourself

Same data, empty answer cell. Your formula is graded instantly, then re-checked on changed data, so a typed-in number won't pass.

Calculate budget variance percentage

In D2, calculate how far actual spending is over or under budget as a percentage of the budget, then fill down to D6.

Questions

How do I label over and under budget?

Wrap it in IF: =IF(C2>B2,"Over","Under")&" by "&TEXT(ABS(D2),"0.0%").

How do I highlight variances over 10%?

Use conditional formatting with the rule =ABS($D2)>10%.

Checked by running on 2026-10-30: every formula and result on this page was calculated by the Spreadsheet Practice formula engine, in both Excel and Google Sheets modes.