Link Budget is a calculation used to estimate the received signal strength from a transmitter and overall system link performance between two points. This formula takes into consideration the distance between the transmit and receive ends of the link, antenna gain, transmit frequency, transmitter and receiver loss, and other factors.

A link budget calculation is important when designing a communication system in order to ensure that the system will operate as intended over it's expected distance and power levels. If the resulting received signal strength (expressed in dBm) is too low, changes to the system may need to be considered.

RF Link Budget Diagram