How to write a proposal – Budget and Financials

How to build a budget for a project proposal

Proposal Budget

This is the last section of your proposal, the budget (sometimes called the financial proposal). This might be part of the same document or you might be requested to provide it separately.

It is of prime importance that this section is synthetic and clear, and that its structure is solid.

This structure groups together a few industry best practices, and it is pretty much as good as it gets, enjoy!



Before we start, I need you to be familiar with a few notions:

Person hours: the amount of working hours necessary to carry out a task (e.g. 100 person hours can mean one person working one hundred hours or 10 people working 10 hours each for the task).

Person days: the actual time, expressed in days, you need to carry out the project. One person-day equals 8 person-hours (number of working hours in a day).

Project duration (days): different from person days, e.g. if I say that a project with four people will take 100 person days in the space of a month, it means that a team of four people will work 100 person days (25 each) for the total of a month.

Hourly rate: how much each person is paid per hour.

Daily rate: how much each person is paid per day. Equals the hourly rate times 8 (number of working hours in a day).


Overview of a financial proposal workflow

In a financial proposal, you need to outline to the evaluator:

  • The total amount needed for the project (total budget);
  • The total amount needed per Work Package;
  • The total amount needed per person;
  • The total amount needed per partner (in case you work in a consortium, I’ll give you the examples below under this assumption).

To do this, follow this workflow:

  1. Estimate the number of hours and days you would need per each work package;
  2. Estimate who will work on each work package for which amount of hours and days (person-hours and person-days);
  3. Calculate the hourly and daily rate per person;
  4. Multiply the person-hours by the hourly rate (and person-days with daily rates) of each person in each Work Package;
  5. Include indirect and subcontracting costs;
  6. Compile everything and present it.

Have a look at the Excel file and template I have prepared for you as an example and follow it for the coming paragraphs. You can download them both here.


Estimate the number of hours you would need per each work package

This is up to your project and the timeline you have, there are no specific rules for this. It is simply a matter of assessing how much work you would need for each WP.


Estimate who will work on each work package for which amount of hours (person-hours)

Again, depending on the project: you will know who of your team will need to work for how long for each WP.


Calculate the hourly rate per person

Your hourly rate must be related to the actual working hours you have in a year (this is based on Horizon 2020 – just relating it here…).

(1) Calendar days per year minus weekends 261
(2) Annual holidays (in n° of days) 30
(3) Statutory holidays (in nº of days) 10
(4) Others (i.e. illness etc.) (in n° of days) 10
(5) Productive days per year: (1) – (2) – (3) – (4) 211
(6) Working hours per day 8,00
(7) Annual working hours: (1) x (6) 2.088
(8) Productive hours per year: (5) x (6) 1.688
(9) Productive hours per month 141

 Once that is taken care of, it is time to estimate the hourly rate. To this end, you need to have this information at hand for each person:

  • Employee’s salary
  • Employer’s social security charges per year per employee
  • Other Direct costs per employee (Lunch tickets, car, telephone…)

Sum the above costs and divide them by the Yearly productive hours to obtain the hourly rate.

Staff Name Staff Category  Salary cost per year (Staff) – Hourly rate as per contract -(1) Employer’s Social Security charges per year – (2) Other DIRECT costs for employee – (3)  Total annual cost per employee – (1 + 2 + 3) Hourly Labour rate
(Total annual costs per employee / Productive Hours per year)
Jeremy Matthews Partner  120.000,00  24.000,00  2.000,00  146.000,00 86,49
Rianne Loewens Senior  100.000,00  20.000,00  1.500,00  121.500,00 71,98
Alfonso Rubens Junior  75.000,00  15.000,00  1.500,00  91.500,00 54,21

Multiply the person-hours by the hourly rate of each person in each Work Package and sum the results

This is a basic multiplication – basically you want to estimate how much each person will cost you per work package.

Include indirect and subcontracting costs

Include here all costs that are not directly related to labour, such as:

  • Professional meetings
  • Project-related travel
  • Subsistence
  • Printing services (reports, etc.)
  • Publication costs
  • Photographic services
  • Service contracts
  • Rooms rental
  • Subcontracts

Make sure you associate the indirect costs as well.

Compile everything and present it

This is how your final budget should look like.

Our Company / Consortium proposes a total price of € 57,936.37.


Company Staff Costs Subcontracting Travel Budget Other Costs Risk Total
Ganem 35,000.00 2,400.00 1,500.00 38,900.00
Merp 12,150.00 2,400.00 14,550.00
Yellow 2,019.81 2,400.00 4,419.81
Total 49,169.81 7,200.00 1,500.00 57,936,27


Staff Costs Breakdown:

 Work packages Total Ganem Merp Yellow
WP1: 17,150.00 15,000.00 2,150.00
WP2: 20,000.00 15,000.00 5,000.00
WP3: 12,019.81 5,000.00 5,000.00 2,019.81
Total: 49,169.81 35,000.00 12,150.00 2,019.81


Travel Budget

The budget condsiders a single trip to the client’s premises at a cost of 1,200.00 € per traveler. There will be two travelers per company.

Other costs

The listed cost is for the rental of the lighting equipment in Task 3.1




At this point, you have learned what techniques to use and how to structure a proposal correctly and coherently with the budget. If your goal was to know what you need to get in on public tendering, congratulations, you’re done!

If you want to dig deeper, though (and I suggest you do), stick around and take a look at the next post. This is more of a collection of “soft” skills that will dramatically improve the effectiveness of your text and speed you up.

And as always, ask questions if you have any, and don’t forget to share my friend! 😉

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