TL;DR: Most articles on the estimate at completion formula list all four variants and leave the choice to you. This one maps each formula to a specific project scenario, so you can pick the right version based on actual cost and schedule data, not instinct. You'll also see how to spot when your EAC is drifting before it becomes a budget overrun.
What is estimate at completion in project management?
Estimate at completion (EAC) is a forecasting metric in earned value management that tells you how much a project will cost in total, based on actual performance to date.
That single number matters because budget overruns rarely announce themselves early. By the time a project feels expensive, the damage is already done. EAC gives you a running forecast you can act on, not a post-mortem you read after the fact.
The formula connects three core variables: Budget at Completion (BAC), Actual Cost (AC), and Cost Performance Index (CPI). Different combinations of those variables produce four distinct earned value management EAC variants, each suited to a different project situation. Most explanations list the formulas and stop there. The more useful question is which formula fits your current cost trajectory, and that depends on whether past performance is likely to hold, improve, or get worse.
If you want to pair EAC with a realistic schedule forecast, estimating time to completion accurately covers the complementary side of that picture.
The next section breaks down all four estimate at completion formula variants with the specific scenario where each one applies.
The four EAC formulas and when to use each
The estimate at completion formula isn't one formula — it's four, each built for a different assumption about how the rest of your project will perform. Picking the wrong one doesn't just give you a bad number; it gives you false confidence in a budget forecast that's already drifting.
Here's how to match each variant to your actual situation.
EAC = BAC / CPI
Use when: Your current cost performance is expected to continue for the rest of the project.
Formula: EAC = BAC ÷ CPI, where CPI = EV ÷ AC.
This is the most widely used variant in earned value management formulas and the one PMI's Practice Standard for Earned Value Management treats as the default. If your team has been running 10% over budget consistently, this formula assumes that pattern holds. It's the right call on projects where early performance is a reliable predictor — typically fixed-scope, stable-team engagements past the 20% completion mark.
EAC = AC + (BAC – EV)
Use when: The original estimate was a one-time error and future work will proceed at the planned rate.
Formula: EAC = AC + remaining budget at plan.
This is the optimistic variant. You're saying: "We overspent early, but the rest of the work is fine." Use it only when you can point to a specific, isolated cause — a delayed vendor delivery, a one-off scope change — that won't repeat. Without that evidence, this formula flatters your forecast.
EAC = AC + [(BAC – EV) ÷ CPI]
Use when: Both past performance and remaining work are expected to reflect your current efficiency.
Formula: EAC = AC + remaining work adjusted for CPI.
This is the conservative middle ground. It applies your cost performance index CPI to the work still ahead, not just to what's done. On large IT projects where scope is partially complete and team velocity is measurable, this variant tends to be the most accurate.
EAC = AC + [(BAC – EV) ÷ (CPI × SPI)]
Use when: The project is behind on both cost and schedule, and both pressures will affect remaining work.
Formula: EAC = AC + remaining work adjusted for CPI and SPI (Schedule Performance Index).
This is the most conservative variant. If your project completion forecasting shows slippage on both dimensions, this formula captures the compounding effect. It's particularly relevant when a compressed timeline forces overtime or parallel workstreams that drive up cost.
The budget at completion (BAC) is the anchor in every variant — get that number wrong and all four formulas inherit the error.
How to calculate estimate at completion step by step
Take a software project with a budget at completion (BAC) of $100,000. Midway through, your team has spent $55,000 (actual cost, or AC) but only completed work valued at $40,000 (earned value, or EV).
First, calculate the cost performance index CPI:
CPI = EV / AC = $40,000 / $55,000 = 0.727
A CPI below 1.0 means you're getting less than a dollar of work done for every dollar spent. At 0.727, you're delivering roughly 73 cents of value per dollar.
Now apply the most common estimate at completion formula:
EAC = BAC / CPI = $100,000 / 0.727 = $137,552
That single calculation tells you the project is tracking toward a $37,552 overrun if current spending efficiency holds. No guesswork, no gut feel.
Here's how to calculate estimate at completion on your own project in four steps:
Pull your approved budget at completion (BAC) from the project baseline.
Calculate EV: multiply the percentage of work completed by BAC.
Divide EV by actual cost to get CPI.
Divide BAC by CPI to get EAC.
The formula assumes your current cost efficiency continues for the rest of the project. That assumption is realistic for most IT projects once patterns are established, which is why PMI's Practice Standard for Earned Value Management lists this variant as the default forecasting method.
If your CPI is still volatile early in the project, how earned value analysis works in practice covers when to switch to a different formula variant instead.
How EAC helps with project budgeting and forecasting
A live EAC figure changes budget conversations because it replaces gut-feel forecasting with math. Once you know your CPI, a small efficiency drop compounds fast. A CPI of 0.85 on a $200,000 project produces an EAC of $235,000. Drop that CPI to 0.78 mid-project and EAC climbs to $256,000 — a $21,000 swing from one sprint's worth of slippage.
That compounding effect is exactly why recalculating the estimate at completion formula every sprint matters. A single calculation tells you where you stand. A series of calculations tells you whether the trend is recoverable.
In practice, earned value management EAC works as an early warning signal. If EAC is creeping past budget at completion (BAC) by sprint three, you still have time to reduce scope, add resources, or reset client expectations. By sprint eight, those options shrink.
For EAC formula project management to actually influence decisions, the number needs to be visible to the right people at the right time. Taro surfaces EAC alongside live CPI so project managers catch budget drift before it becomes a client conversation.
EAC vs ETC: what is the difference?
EAC and ETC are related but answer different questions. EAC tells you what the entire project will cost when finished. ETC tells you what it will cost to finish from today forward.
Dimension | EAC | ETC |
|---|---|---|
Definition | Total forecasted cost at project completion | Remaining cost to complete the project |
Core formula | BAC / CPI | EAC − AC |
When to use | At any sprint review or status gate | When you need to isolate remaining spend |
Primary audience | Sponsors, budget owners, steering committees | Project managers, delivery leads |
The relationship between them is direct: once you have your estimate at completion formula result, ETC is simply what's left after subtracting actual costs already incurred.
Use EAC when a stakeholder asks "what will this project cost in total?" Use ETC when your team asks "how much budget do we have left to work with?"
To understand how BAC feeds into both calculations, see how Budget at Completion is established before a project starts.
What to do after you calculate EAC
Once you have your EAC number, the calculation is the easy part. What you do next determines whether the project recovers or quietly overruns.
Compare EAC against BAC first: If EAC exceeds your budget at completion (BAC) by more than 10%, that gap is a trigger, not just a data point. It means one of three things: scope needs to be cut, the budget needs a formal reforecast, or a stakeholder conversation needs to happen before the next sprint closes.
Which action depends on why EAC moved. A CPI-driven variance points to execution problems. A scope change points to planning gaps. Treat them differently.
Most teams recalculate EAC manually each reporting cycle, which means they catch problems a week late. Project completion forecasting built into your work management tool recalculates continuously, so the trigger fires when the variance opens, not when someone finally runs the numbers.
For the underlying earned value management formulas that feed EAC, the inputs matter as much as the output.
Frequently asked questions about the estimate at completion formula
What is the estimate at completion formula?
The estimate at completion formula calculates the projected total cost of a project based on current performance. The most common version is EAC = BAC / CPI, where BAC is the budget at completion and CPI is the cost performance index (actual cost divided into earned value). Use this formula when current spending trends are expected to continue through project close.
How do you calculate estimate at completion?
To calculate EAC, divide your BAC by your current CPI. If your project has a BAC of $100,000 and a CPI of 0.85, your EAC is $117,647 — meaning you're tracking $17,647 over budget at completion. For projects where past variance was a one-time event, use EAC = AC + (BAC – EV) instead. Choosing the right formula matters more than running the calculation itself.
What is the difference between EAC and ETC?
EAC is the total forecasted cost from project start to finish. ETC (estimate to complete) is only the remaining work cost. The relationship is ETC = EAC – AC. Both draw from the same earned value management formulas, but ETC answers "what do we still need to spend?" while EAC answers "what will this project cost in total?"
When should you recalculate EAC in EAC formula project management?
Recalculate whenever CPI shifts by more than 0.1, a scope change is approved, or a major risk materializes. Static EAC figures mislead stakeholders. Teams using project completion forecasting tied to live cost data catch these shifts automatically rather than discovering them in a monthly review.
Closing
The estimate at completion formula only works if you recalculate it every sprint—and that's where most IT project managers hemorrhage time. You now know which of the four variants matches your cost trajectory, and you can spot budget drift before it becomes a client crisis. The real leverage comes from treating EAC as a live forecast, not a one-time calculation. Stop recalculating manually each cycle: Taro's completion forecasting runs this automatically using live task and cost data, so your forecast updates without touching a spreadsheet. Ready to catch budget overruns before they happen?
FAQ
What is the estimate at completion formula in project management?
EAC is a forecasting metric in earned value management that predicts total project cost based on actual performance to date. It connects Budget at Completion (BAC), Actual Cost (AC), and Cost Performance Index (CPI) to give you a running forecast before budget overruns happen.
How do I calculate the estimate at completion for my project?
Calculate CPI (Earned Value ÷ Actual Cost), then divide BAC by CPI. For a $100,000 project with $55,000 spent and $40,000 earned: CPI = 0.727, so EAC = $137,552. This four-step process takes minutes and reveals your cost trajectory immediately.
What are the different types of EAC formulas used in project management?
Four variants exist: BAC/CPI (current performance continues), AC + (BAC–EV) (early error, future work on track), AC + [(BAC–EV)/CPI] (both past and remaining work reflect efficiency), and AC + [(BAC–EV)/(CPI×SPI)] (cost and schedule pressure compound). Pick based on your actual situation, not instinct.
How does the EAC formula help in project budgeting and forecasting?
EAC replaces gut-feel forecasting with math. A CPI drop from 0.85 to 0.78 on a $200,000 project swings EAC by $21,000 in one sprint. Recalculating every cycle lets you catch drift early enough to reduce scope, add resources, or reset expectations before options disappear.
What is the difference between EAC and ETC in earned value management?
EAC forecasts total project cost at completion. ETC forecasts what it will cost to finish from today forward. EAC answers "how much total?"; ETC answers "how much more?"
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Elena Petrova is a Project Management Consultant & Agile Coach who has delivered complex multi-team projects for technology companies across Eastern Europe and the US. She writes about sprint design, team velocity, and the project discipline that consistently separates teams that ship on schedule from teams that are always one week away from done.