diff --git a/tests/test_budget_tracker_bounds.py b/tests/test_budget_tracker_bounds.py
new file mode 100644
index 00000000000..27b3dcfdfcd
--- /dev/null
+++ b/tests/test_budget_tracker_bounds.py
@@ -0,0 +1,30 @@
+\"\"\"
+Unit tests for user and team budget tracking arithmetic and threshold evaluation in LiteLLM proxy.
+\"\"\"
+import pytest
+from typing import Dict, Any
+
+def test_spend_threshold_exceeded():
+    max_budget = 100.0
+    current_spend = 95.50
+    incoming_cost = 5.00
+    
+    projected_spend = current_spend + incoming_cost
+    is_exceeded = projected_spend > max_budget
+    assert is_exceeded is True
+    assert round(projected_spend, 2) == 100.50
+
+def test_spend_threshold_within_limit():
+    max_budget = 50.0
+    current_spend = 20.0
+    incoming_cost = 12.50
+    
+    projected_spend = current_spend + incoming_cost
+    is_exceeded = projected_spend > max_budget
+    assert is_exceeded is False
+    assert projected_spend == 32.50
+
+def test_daily_budget_reset_calculation():
+    budget_duration = "1d"
+    seconds_in_day = 86400
+    assert seconds_in_day == 24 * 60 * 60
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