Mae'r angen cymharol yn cael ei gyfrifo drwy fformiwla fanwl sy'n cymryd i ystyriaeth nodweddion demograffig, cymdeithasol, economaidd a ffisegol pob Awdurdod. Adolygir a chytunir ar y fformiwla bob blwyddyn gyda Llywodraeth Leol. Byddai defnyddio lleddfu o flwyddyn i flwyddyn yn erydu'r cyswllt rhwng cyllid a'r angen cymharol i wario, gan symud cyllid oddi wrth yr Awdurdodau hynny a aseswyd fel rhai sydd â'r angen mwyaf o’u cymharu ag Awdurdodau eraill.
The relative need is calculated through a detailed formula which takes account of the demographic, social, economic and physical characteristics of each Authority.  This formula is reviewed and agreed each year with Local Government.  Applying damping year-on-year would erode the link between funding and the relative need to spend, moving funding from those Authorities assessed as having the greatest relative need to other Authorities.