A method that budgets power allocation for an information handling system (IHS) includes: in response to determining that the IHS is to be powered by a redundant configuration of PSUs, budgeting a first amount of power that is less than a maximum power that can be utilized by the system, and configuring the system to autonomously utilize unused operating margin of the secondary PSU(s) in a redundant configuration of the PSUs during periods in which the system requires greater than the first amount of power; and in response to the information handling system not being powered by a redundant configuration of multiple PSUs, budgeting a second amount of power for the system that is at least equal to the maximum power that can be utilized by the system and is within the output of the primary PSU.