How to Calculate Budget Variance in Excel – 3 Steps

Budget Variance is the difference between the actual amount and the forecast amount.

The dataset showcases a company’s Actual Revenue, Budget Revenue and the revenue of the previous year.

To calculate the Budget Variance for this year and the previous year:

Step 1: Creating a Dataset 

• Create a dataset. Add the actual revenue column to calculate the variance.

• Add “Budget Variance” and “Percentage Variance” on both sides to calculate “Budget vs. Actual” and “Actual vs. Previous Year”.

Read More: Budget vs Actual Variance Formula in Excel

Step 2: Calculating the Budget Variance Using an Excel Formula

Calculate the budget and percentage variance using formulas.

• Enter the following formula in the selected cell (E6):

• Press Enter.
• Drag down the Fill Handle to see the result in the rest of the cells.

• The budget variance is calculated.

Calculate the percentage variance:

• Use the following formula in F6:

• Percentage Variance=Budget Variance/Actual Revenue.

• Press Enter.
• Drag down the Fill Handle to see the result in the rest of the cells.

• The budget variance and the percentage variance is displayed. Use conditional formatting: check this link.

Read More: How to Calculate Semi Variance in Excel

Step 3 – Calculating the Budget Variance from Previous Year Data 

• Choose a cell. Here, J6.
• Enter the formula down.

• Press Enter.
• Drag down the Fill Handle to see the result in the rest of the cells.

This is the output.

• Select K6 and enter the formula to determine the percentage variance:

• The percentage variance is calculated.

• This is the final output.

Read More: How to Create Minimum Variance Portfolio in Excel

Download Practice Workbook

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