diff --git a/litellm/proxy/_types.py b/litellm/proxy/_types.py
index 7b0e92d81ae..d1cb4ea7365 100644
--- a/litellm/proxy/_types.py
+++ b/litellm/proxy/_types.py
@@ -3106,6 +3106,12 @@ class UserAPIKeyAuth(LiteLLM_VerificationTokenView):  # the expected response ob
         ),
     )
     budget_reservation: dict[str, Any] | None = Field(default=None, exclude=True)
+    # Whether this request is exempt from budget enforcement because the requested
+    # model is zero-cost. Decided once in user_api_key_auth() and published here so
+    # every enforcement point agrees, including the ones that run after auth.
+    # exclude=True keeps it out of serialised key responses; the default enforces
+    # the budget, so a path that never computed the exemption fails closed.
+    skip_budget_checks: bool = Field(default=False, exclude=True)
     matched_model_access_groups: list[str] | None = Field(default=None, exclude=True)
     budget_throttle_pct: float | None = Field(default=None, exclude=True)
     user: Any | None = None  # Expanded user object when expand=user is used
diff --git a/litellm/proxy/auth/auth_checks.py b/litellm/proxy/auth/auth_checks.py
index 18095aaafb4..fbee77d1876 100644
--- a/litellm/proxy/auth/auth_checks.py
+++ b/litellm/proxy/auth/auth_checks.py
@@ -436,7 +436,7 @@ def _is_model_cost_zero(model: str | list[str] | None, llm_router: Router | None
             # not from defaulted sparse auto-registration entries.
             # See: https://github.com/BerriAI/litellm/issues/24770
             safe_name = str(model_name).replace("\n", "").replace("\r", "")
-            if not _is_cost_explicitly_configured(model_name, llm_router):
+            if not _group_declares_explicit_cost(model=model_name, llm_router=llm_router):
                 verbose_proxy_logger.debug(
                     "Model %s has zero cost but no explicit cost "
                     "configuration in model_cost entry — treating as unknown "
@@ -484,38 +484,18 @@ def _has_ptu_flat_cost(model: str, llm_router: "Router") -> bool:
 
     Such a deployment carries an explicit zero per-token price so the flat cost is not charged
     twice, which otherwise reads here as a free model and waives every budget check for it.
+
+    Resolved through ``Router.get_model_list()`` so a model_group_alias pointing at a PTU group
+    is covered; scanning ``model_list`` by exact name never matches an alias, and the caller
+    treats a False here as "no flat cost to worry about".
     """
-    for deployment in llm_router.model_list:
-        if deployment.get("model_name") != model:
-            continue
+    for deployment in llm_router.get_model_list(model_name=model) or ():
         model_info = deployment.get("model_info") or _NO_MODEL_INFO
         if model_info.get("ptu_count") is not None and model_info.get("cost_per_ptu_per_hour") is not None:
             return True
     return False
 
 
-def _is_cost_explicitly_configured(model: str, llm_router: "Router") -> bool:
-    """
-    Check if any deployment in the model group has cost fields explicitly
-    set in its litellm.model_cost entry.
-
-    When Router._create_deployment() registers a model not in the global
-    cost map, it creates a sparse entry like {"id": "<hash>"} with no cost
-    fields. _get_model_info_helper() then defaults missing costs to 0.
-    This function detects that scenario by checking the raw model_cost entry.
-    """
-    for deployment in llm_router.model_list:
-        if deployment.get("model_name") != model:
-            continue
-        model_id = deployment.get("model_info", {}).get("id")
-        if model_id is None:
-            continue
-        raw_entry = litellm.model_cost.get(model_id, {})
-        if "input_cost_per_token" in raw_entry or "output_cost_per_token" in raw_entry:
-            return True
-    return False
-
-
 _EMPTY_COST_ENTRY: Final[Mapping[str, object]] = MappingProxyType({})
 
 
@@ -567,7 +547,7 @@ def _model_group_has_pricing(model: str, llm_router: "Router") -> bool:
 
 def _group_declares_explicit_cost(model: str, llm_router: "Router") -> bool:
     """
-    Alias-aware counterpart to ``_is_cost_explicitly_configured``, which resolves the model group
+    Whether any deployment in the model group prices itself explicitly. Resolves the model group
     the same way ``_model_group_has_pricing`` does. A deployment that prices itself through its
     ``model_info`` block lands in the cost map under its deployment id rather than in its
     litellm_params, and reaching that entry through the router's own resolution keeps an alias
diff --git a/litellm/proxy/auth/user_api_key_auth.py b/litellm/proxy/auth/user_api_key_auth.py
index 20ab9904f46..4c8d10762af 100644
--- a/litellm/proxy/auth/user_api_key_auth.py
+++ b/litellm/proxy/auth/user_api_key_auth.py
@@ -1592,6 +1592,7 @@ async def _user_api_key_auth_builder(
                         skip_budget_checks = _is_model_cost_zero(model=model, llm_router=llm_router)
                         if skip_budget_checks:
                             verbose_proxy_logger.info("Skipping all budget checks for zero-cost model: %s", model)
+                    valid_token.skip_budget_checks = skip_budget_checks
 
                     # Fetch project object for JWT path if project_id is set
                     _jwt_project_obj = None
@@ -2019,6 +2020,7 @@ async def _user_api_key_auth_builder(
                 skip_budget_checks = _is_model_cost_zero(model=model, llm_router=llm_router)
                 if skip_budget_checks:
                     verbose_proxy_logger.info("Skipping all budget checks for zero-cost model: %s", model)
+            valid_token.skip_budget_checks = skip_budget_checks
 
             # Check 3. Check if user is in their team budget
             if not skip_budget_checks and valid_token.team_member_spend is not None:
@@ -2650,6 +2652,7 @@ async def _run_centralized_common_checks(
         request=request,
         llm_router=llm_router,
     )
+    user_api_key_auth_obj.skip_budget_checks = skip_budget_checks
 
     # Pin the metadata variable name (litellm_metadata vs metadata) before
     # any tag merge runs. Without this, header tags from
diff --git a/litellm/proxy/hooks/max_budget_limiter.py b/litellm/proxy/hooks/max_budget_limiter.py
index eaf37b0bcf1..d5f3f296f18 100644
--- a/litellm/proxy/hooks/max_budget_limiter.py
+++ b/litellm/proxy/hooks/max_budget_limiter.py
@@ -32,6 +32,19 @@ class _PROXY_MaxBudgetLimiter(CustomLogger):
             if max_budget is None or user_id is None:
                 return
 
+            # A zero-cost model is exempt from the personal budget, as it already is
+            # from the key, team and end-user budgets. The exemption is not recomputed
+            # here: user_api_key_auth() decided it and published it on the auth object,
+            # the same way budget_reservation below is handed in, so this hook cannot
+            # disagree with the checks that ran during auth.
+            if user_api_key_dict.skip_budget_checks:
+                verbose_proxy_logger.debug(
+                    "MaxBudgetLimiter: user_id=%s is over budget but the request is exempt "
+                    "(zero-cost model) - allowing",
+                    user_id,
+                )
+                return
+
             from litellm.proxy.proxy_server import general_settings
 
             if (
diff --git a/litellm/router.py b/litellm/router.py
index 8865543badd..8f57256fc47 100644
--- a/litellm/router.py
+++ b/litellm/router.py
@@ -9980,7 +9980,7 @@ class Router:
 
         A strategy-router alias is never the deployment actually called or
         billed, so custom pricing configured on it must not become a cost-map
-        price: an explicit zero would let ``_is_cost_explicitly_configured``
+        price: an explicit zero would let ``_group_declares_explicit_cost``
         treat the alias as a genuinely free model and waive budget checks for
         requests that route to (and bill as) a real deployment.
         """
diff --git a/litellm/utils.py b/litellm/utils.py
index 1a77655a5a4..2889319d85d 100644
--- a/litellm/utils.py
+++ b/litellm/utils.py
@@ -3182,7 +3182,7 @@ def register_model(
         # = 0 when they are absent from the raw entry. Writing those zeros
         # back flips a sparse entry from "no cost keys" (priced via name)
         # to "cost keys = 0" (free), which makes
-        # ``_is_cost_explicitly_configured`` return True and silently
+        # ``_group_declares_explicit_cost`` return True and silently
         # disables budget enforcement on the next re-registration.
         _raw_entry = litellm.model_cost.get(model_cost_key)
         if _raw_entry is None:
diff --git a/tests/test_litellm/proxy/auth/test_unmapped_model_budget_enforcement.py b/tests/test_litellm/proxy/auth/test_unmapped_model_budget_enforcement.py
index bbe343bcede..9a87373f72b 100644
--- a/tests/test_litellm/proxy/auth/test_unmapped_model_budget_enforcement.py
+++ b/tests/test_litellm/proxy/auth/test_unmapped_model_budget_enforcement.py
@@ -211,3 +211,111 @@ class TestUnmappedModelBudgetEnforcement:
 
         result = _is_model_cost_zero(model="paid-model", llm_router=mock_router)
         assert result is False
+
+    def test_model_group_alias_to_free_model_bypasses_budget(self):
+        """An explicitly free model reached through model_group_alias should
+        bypass budget, same as when it is called by its own name."""
+        router = Router(
+            model_list=[
+                {
+                    "model_name": "free-model",
+                    "litellm_params": {
+                        "model": "openai/nonexistent-but-free-model",
+                        "api_key": "sk-fake",
+                        "input_cost_per_token": 0.0,
+                        "output_cost_per_token": 0.0,
+                    },
+                    "model_info": {"id": "free-model-id"},
+                },
+            ],
+            model_group_alias={"free-model-alias": "free-model"},
+        )
+        assert _is_model_cost_zero(model="free-model", llm_router=router) is True
+        result = _is_model_cost_zero(model="free-model-alias", llm_router=router)
+        assert result is True, "Alias of an explicitly free model should bypass budget (return True)"
+
+    def test_model_group_alias_to_paid_model_enforces_budget(self):
+        """An alias must not waive budget checks for a paid model group."""
+        router = Router(
+            model_list=[
+                {
+                    "model_name": "paid-model",
+                    "litellm_params": {
+                        "model": "openai/gpt-4o-mini",
+                        "api_key": "sk-fake",
+                    },
+                },
+            ],
+            model_group_alias={"paid-model-alias": "paid-model"},
+        )
+        result = _is_model_cost_zero(model="paid-model-alias", llm_router=router)
+        assert result is False, "Alias of a paid model should enforce budget"
+
+    def test_hidden_model_group_alias_enforces_budget(self):
+        """A hidden alias has no resolvable model group, so budget stays enforced."""
+        router = Router(
+            model_list=[
+                {
+                    "model_name": "free-model",
+                    "litellm_params": {
+                        "model": "openai/nonexistent-but-free-model",
+                        "api_key": "sk-fake",
+                        "input_cost_per_token": 0.0,
+                        "output_cost_per_token": 0.0,
+                    },
+                    "model_info": {"id": "free-model-id"},
+                },
+            ],
+            model_group_alias={"hidden-alias": {"model": "free-model", "hidden": True}},
+        )
+        result = _is_model_cost_zero(model="hidden-alias", llm_router=router)
+        assert result is False, "Hidden alias should enforce budget"
+
+    def test_dangling_model_group_alias_enforces_budget(self):
+        """An alias pointing at a model group that does not exist must not bypass budget."""
+        router = Router(
+            model_list=[
+                {
+                    "model_name": "free-model",
+                    "litellm_params": {
+                        "model": "openai/nonexistent-but-free-model",
+                        "api_key": "sk-fake",
+                        "input_cost_per_token": 0.0,
+                        "output_cost_per_token": 0.0,
+                    },
+                    "model_info": {"id": "free-model-id"},
+                },
+            ],
+            model_group_alias={"dangling-alias": "no-such-model-group"},
+        )
+        result = _is_model_cost_zero(model="dangling-alias", llm_router=router)
+        assert result is False, "Alias to a missing model group should enforce budget"
+
+    def test_model_group_alias_to_ptu_flat_cost_enforces_budget(self):
+        """A PTU deployment bills reserved capacity as a flat cost and carries an explicit
+        zero per-token price. Reaching it through an alias must still enforce budget."""
+        router = Router(
+            model_list=[
+                {
+                    "model_name": "ptu-model",
+                    "litellm_params": {
+                        "model": "azure/gpt-4o",
+                        "api_key": "sk-fake",
+                        "api_base": "https://example.openai.azure.com",
+                        "input_cost_per_token": 0.0,
+                        "output_cost_per_token": 0.0,
+                    },
+                    "model_info": {
+                        "id": "ptu-model-id",
+                        "input_cost_per_token": 0.0,
+                        "output_cost_per_token": 0.0,
+                        "ptu_count": 100,
+                        "cost_per_ptu_per_hour": 2.0,
+                    },
+                },
+            ],
+            model_group_alias={"ptu-model-alias": "ptu-model"},
+        )
+        assert _is_model_cost_zero(model="ptu-model", llm_router=router) is False
+        result = _is_model_cost_zero(model="ptu-model-alias", llm_router=router)
+        assert result is False, "Alias of a PTU flat-cost model should enforce budget"
diff --git a/tests/test_litellm/proxy/hooks/test_max_budget_limiter.py b/tests/test_litellm/proxy/hooks/test_max_budget_limiter.py
index 71671966d1a..e49fa462b53 100644
--- a/tests/test_litellm/proxy/hooks/test_max_budget_limiter.py
+++ b/tests/test_litellm/proxy/hooks/test_max_budget_limiter.py
@@ -27,6 +27,7 @@ def _make_user_api_key_auth(
     user_spend: float = 0.0,
     team_id=None,
     budget_reservation=None,
+    skip_budget_checks: bool = False,
 ) -> UserAPIKeyAuth:
     return UserAPIKeyAuth(
         api_key="sk-test",
@@ -35,6 +36,7 @@ def _make_user_api_key_auth(
         user_spend=user_spend,
         team_id=team_id,
         budget_reservation=budget_reservation,
+        skip_budget_checks=skip_budget_checks,
     )
 
 
@@ -235,3 +237,43 @@ async def test_no_max_budget_passes():
 
     assert result is None
     mock_get_spend.assert_not_awaited()
+
+
+# `get_current_spend` falls back to the caller-supplied `fallback_spend`, which the hook
+# passes from `user_api_key_dict.user_spend`, so an over-budget request can be set up
+# through the auth object alone -- no need to patch the SDK's own spend lookup. The pair
+# below differs only in `skip_budget_checks`, which is what pins the exemption.
+
+
+@pytest.mark.asyncio
+async def test_budget_exempt_request_passes_when_over_budget():
+    """A request auth marked exempt (zero-cost model) is admitted despite being over budget."""
+    handler = _PROXY_MaxBudgetLimiter()
+    user_api_key_dict = _make_user_api_key_auth(user_max_budget=10.0, user_spend=99.0, skip_budget_checks=True)
+
+    result = await handler.async_pre_call_hook(
+        user_api_key_dict=user_api_key_dict,
+        cache=DualCache(),
+        data={"model": "free-model"},
+        call_type="completion",
+    )
+
+    assert result is None
+
+
+@pytest.mark.asyncio
+async def test_non_exempt_request_still_blocked_when_over_budget():
+    """The same request without the exemption is still refused, so the flag is what admits it."""
+    handler = _PROXY_MaxBudgetLimiter()
+    user_api_key_dict = _make_user_api_key_auth(user_max_budget=10.0, user_spend=99.0)
+
+    with pytest.raises(HTTPException) as exc_info:
+        await handler.async_pre_call_hook(
+            user_api_key_dict=user_api_key_dict,
+            cache=DualCache(),
+            data={"model": "paid-model"},
+            call_type="completion",
+        )
+
+    assert exc_info.value.status_code == 429
+    assert "Max budget limit reached." in exc_info.value.detail
diff --git a/tests/test_litellm/test_register_model_zero_cost_persistence.py b/tests/test_litellm/test_register_model_zero_cost_persistence.py
index 15c8721a7f1..a5ad3a1f5e5 100644
--- a/tests/test_litellm/test_register_model_zero_cost_persistence.py
+++ b/tests/test_litellm/test_register_model_zero_cost_persistence.py
@@ -13,7 +13,7 @@ already-present sparse entry (e.g. router model id with only
 ``{"id": ..., "db_model": True}``), the synthesized zeros get written
 back, and the entry flips from "no cost keys" → "cost keys = 0".
 
-That defeats ``_is_cost_explicitly_configured`` (added in #24949), which
+That defeats ``_group_declares_explicit_cost`` (added in #24949), which
 checks whether the cost keys are present in the raw entry — after the
 write-back they are. ``_is_model_cost_zero`` then returns ``True`` and
 ``common_checks`` skips every tag / key / team / user / org budget check