Free Project Budget Template — Excel Download

01 — What's Included

Template Layout — Phase × Category Budget Matrix

The budget is structured as a two-dimensional matrix: project phases run down the rows, cost categories run across the columns. For each phase/category intersection you enter the planned amount — actuals are entered as the project progresses. The template auto-calculates totals, variances and percentage used at every level.

Phase / Category	Cost Type	Planned ($)	Actual ($)	Variance ($)	% Used
1.0 Initiation		12,000	11,400	600	95%
Labour	Internal	8,000	7,800	200	98%
Consultancy	External	4,000	3,600	400	90%
2.0 Planning		28,000	31,200	−3,200	111%
Labour	Internal	16,000	18,500	−2,500	116%
Software	CapEx	8,000	8,200	−200	103%
Consultancy	External	4,000	4,500	−500	113%
Contingency Reserve	Risk buffer	25,000	8,000	17,000 remaining	32% drawn
TOTAL (excl. contingency)		180,000	96,400	+3,200 ahead	54%

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Positive variance means under budget, negative means over. The template calculates Variance as Planned − Actual. A positive number means you have spent less than planned (under budget — shown in green). A negative number means you have spent more than planned (over budget — shown in red). This follows the same convention as Cost Variance in EVM: positive is good, negative is a concern.

02 — Cost Categories

The Six Standard Cost Categories

The template uses six cost categories covering the full range of typical project expenditure. Add or remove categories to match your organisation's chart of accounts — the important thing is that categories are consistent throughout the project lifecycle so actuals can be compared like-for-like against the plan.

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Labour

Internal staff time charged to the project at an agreed rate or opportunity cost.

Typically the largest category — 40–70% of most project budgets.

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Materials & Equipment

Physical purchases — hardware, infrastructure, consumables required to deliver the project.

Separate CapEx from OpEx for finance reporting.

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Software & Licences

Software purchases, SaaS subscriptions and licence fees for tools used on the project.

Include ongoing annual licence costs in the EAC.

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Consultancy

External contractors, agencies, professional services and specialist advisers.

Track against purchase orders, not invoices received.

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Travel & Expenses

Business travel, accommodation, subsistence and venue hire for project activities.

Often under-estimated — check against historical T&E data.

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Other

Training, marketing, legal, insurance and any costs that do not fit the above categories.

If "Other" grows large, break it into sub-categories.

03 — Contingency & Reserves

Contingency Reserve vs Management Reserve

The template includes a dedicated Contingency Reserve section — tracked separately from the direct project costs. Understanding the distinction between contingency reserve and management reserve is essential for presenting an accurate budget to the sponsor.

In the Template

Contingency Reserve

Purpose: Budget for identified risks that may occur

Who controls it: Project Manager

In the baseline: Yes — part of the approved project budget (BAC)

Access: PM can draw on it when a known risk event occurs, without sponsor approval

Typical size: 5–15% of direct project costs

Not in the Template

Management Reserve

Purpose: Buffer for completely unforeseen events (unknown unknowns)

Who controls it: Sponsor or organisation

In the baseline: No — held separately above the BAC

Access: PM must formally request it from the sponsor — requires a scope or budget change

Typical size: 5–10% of total budget

How Much Contingency to Set Aside

The right contingency amount depends on project risk profile, not a fixed percentage. A standard approach: quantify each identified risk using the Expected Monetary Value formula (probability × impact), sum the EMV values across all risks, and use that total as the evidence-based contingency budget. For a quick estimate, 5–10% of direct costs is appropriate for low-risk projects, 10–20% for medium-risk, and 20%+ for high-risk or novel projects. Use the Project Budget Calculator to model contingency scenarios before finalising the budget.

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Track contingency draw-down separately. The Contingency Reserve section in the template shows total reserve, amount drawn to date and remaining balance. Every draw on contingency should be recorded with the risk event it was used for — this creates an audit trail and feeds directly into the lessons learned register at project end. A contingency reserve that is fully drawn by mid-project with no explanation is a governance failure.

04 — Budget and EVM

How This Budget Links to EVM

The project budget template establishes the financial foundation that earned value management builds on. Understanding the connection between the two means you can move seamlessly from budget planning into EVM performance tracking.

The Budget Feeds EVM Directly

The Budget at Completion (BAC) — the total planned project cost from the budget summary row — is the first input to the EVM Tracker. Once the project starts and you begin recording actuals in this budget template, those actual costs become the Actual Cost (AC) values in the EVM tracker. The planned spend by period from this template becomes the Planned Value (PV) schedule.

The budget template answers "how much did we plan to spend and how much have we spent?" The EVM tracker then answers "given how much work we have completed, are we getting value for what we have spent?" Both documents together give a complete picture of project financial health — the budget shows the cash position, EVM shows the performance position.

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PMP exam note: In PMBOK, the cost baseline is the approved time-phased project budget — it is an output of the Determine Budget process. The cost baseline includes direct costs and contingency reserve but not management reserve. The Budget at Completion (BAC) equals the cost baseline. Changes to the cost baseline require formal change control. The difference between the budget at completion and the estimate at completion (EAC = BAC ÷ CPI) is the Variance at Completion (VAC) — the projected over or underrun at project end. See our 200 PMP practice questions for cost management scenario questions.

05 — FAQ

Project Budget — 4 Common Questions

A project budget should include all cost categories needed to deliver the project: labour (internal and external), materials and equipment, software and licences, consultancy, travel and expenses, training, and contingency reserve. It should show the planned amount for each category, actual spend to date, variance and forecast at completion. A well-structured budget separates management reserve (held by the sponsor) from contingency reserve (held by the PM). See the Budget Variance Report for monthly tracking alongside this template.

Contingency reserve is budget for identified risks — part of the approved project budget (BAC), controlled by the PM, accessible when a known risk event occurs. Management reserve is a buffer for unknown unknowns — held by the sponsor above the BAC, requires formal approval to access. In EVM, BAC includes contingency reserve but not management reserve. The PMP exam heavily tests this distinction and which reserve the PM can use without sponsor approval (contingency) versus which requires a formal change (management reserve).

Start from the WBS — estimate each work package and aggregate up. Three techniques: Analogous (use actuals from similar past projects — quick but less accurate). Parametric (use statistical relationships like cost per story point — more accurate with good historical data). Bottom-up (estimate each task individually — most accurate but most time-consuming). For most projects, use analogous for the overall budget and refine with bottom-up for the highest-cost or highest-risk work packages. Use the Project Budget Calculator to model estimates before finalising.

A cost baseline is the approved, time-phased project budget against which actual costs are measured. It includes all direct project costs and contingency reserve, but not management reserve. In PMBOK, the cost baseline is an output of the Determine Budget process and the primary input to EVM. Changes to the cost baseline require formal change control approval. The cost baseline equals the Budget at Completion (BAC) in EVM. To analyse performance against the cost baseline, use the EVM Tracker template alongside this budget template.

Free Project Budget Template Excel Download