How to Calculate the Percentage Over Budget

Calculating the Percentage of an Over-Budgeted Amount

By Motley Fool Staff – Updated Apr 29, 2025 at 11:56 PM EST

Key Points

Review budgets post-project to understand expense variances and improve forecasting.
Calculate over-budget percentages by subtracting budgeted amounts from actual costs.
Analyze specific items in your budget to pinpoint where overages occur, aiding targeted adjustments.

Let's face it: Even the best budgets can't always predict your actual expenses. Things happen. Unexpected costs arise. That's life. That's why it's so useful to review your budget after a project is complete to understand why certain expenses were higher or lower than anticipated. One way to do that is to calculate the percentage over budget. Here's how it's done.

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Person using calculator while holding cash and looking at papers on a desk. — Image source: Getty Images.

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First, calculate the percentage over budget for the total budget to get an understanding of the overall project. Start by finding the difference between the actual total expenses and total budgeted amount. In this case, that's $34. Next, divide by the total original budget and multiply by 100, yielding a percentage over budget of 4%.

In other words, this project cost 4% more than anticipated, so it was just slightly over budget.

Scanning the individual line items, the labor expense was squarely on budget, while the materials and equipment rental contributed to the budget overage. It makes sense to calculate their percentage overages next.

Using the same math, the materials cost was 5.4% over budget, and the equipment rental was 4.7% over budget. Neither of these overages is substantial; each is small enough that the discrepancy could be attributed to something as simple as forgetting to include sales tax in the original budget.