# How to calculate budget variance percentage in Excel

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

**Excel:** `=(C2-B2)/B2` (Every current version)

**Google Sheets:** the same formula works.

## Example

Sample data (row 1 is the header):

| A | B | C | D |
| --- | --- | --- | --- |
| Expense | Budget | Actual | Variance % |
| Salaries | 120000 | 118200 |  |
| Marketing | 25000 | 28750 |  |
| Travel | 8000 | 5600 |  |
| Software | 12000 | 12000 |  |
| Office | 4500 | 4950 |  |

Formula in D2, filled to D6: `=(C2-B2)/B2`

Result: -1.5%; 15.0%; -30.0%; 0.0%; 10.0%

## 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.

## Other ways

- `=C2/B2`: Percent of budget used: 115% for Marketing. (Shows the share of the budget spent, not the variance.)
- `=(B2-C2)/B2`: 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)`.

## 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%`.

Every formula and result on this page was checked by running it in the Spreadsheet Practice formula engine on 2026-10-30.

Source: https://spreadsheetpractice.com/formulas/budget-variance-percentage