Accounting For The Cost Of Going To Work
It’s the last piece in the puzzle as employers entice fiscally conscious staff to return to the office
4 min
Time spent in peak hour traffic, unreliable (and crowded) public transport, the cost of petrol and the ever-elusive quest for a parking spot — the daily commute has long been synonymous with inconvenience and expense.
But as companies urge their employees to reclaim their desks, a fresh wave of calculations has entered the scene and many are now meticulously tallying up the cost of heading into the office compared with working from home.
“Getting back into the office can be great for productivity but it comes at a cost to workers,” says Angus Kidman, money expert at comparison website Finder.
“Whether it’s paying for parking or fares to catch public transport, commuting into the office can be a hefty cost for consumers travelling into the office every day.
“But while remote work eliminates the need for commuting and transport costs, there are still plenty of other costs to be considered working from home.”
It’s no secret that patterns of work have changed drastically since the early days of 2020.
Where once we were content with the daily trip into the office — complete with full corporate wardrobe, coffees, lunch and drinks after work — the pandemic highlighted the ease with which many of us were able to work from home. Fast forward a few years and hybrid work arrangements are now more commonplace. However, in recent months we’ve seen many larger companies beginning to put their foot down on flexible working arrangements.
The truth is that thanks to the rising cost of living and those unrelenting interest rates many Australians are now paying more regardless of where they choose to work. But it seems a conservative estimate of around $10,000 per year to go to the office is the norm when you consider travel, food and your work wardrobe.
Research from Finder reveals consumers spend $122 per week on the commute which amounts to $5,856 over a 48-week work year.
Once we’re at work the spending doesn’t stop, with data indicating Australian workers spend around $1548 a year in their lunch hour — and that doesn’t include your morning coffee.
Commutes and coffees aside, the other big expense with working from the office is undoubtedly the corporate wardrobe although, according to experts, these days it’s more acceptable to be a little less corporate than we may have been used to pre-pandemic.
“Even prior to COVID we were witnessing a more relaxed workplace dress code and now that people have had a taste of dressing more casually, we won’t be in a rush to get back to the corporate that we used to know,” says stylist and corporate image consultant Caitlin Stewart.
“Designers have amended their offerings to reflect greater comfort and versatility in their garments so when curated carefully additional comfort elements can be implemented and still look professional.”
Stewart says a corporate wardrobe update can cost anywhere between $3000-$5000.
She also says while most men are still opting for suits in a corporate environment, the days of office heels and a full face of makeup for women are definitely over.
“A woman can look exceptionally polished in professional, flat loafers and a light face of makeup or just a clean and fresh face.”
Naturally, the actual costs people incur in the office or at home will depend on their specific circumstance but for Simon Kuestenmacher, co-founder of The Demographics Group, the bottom line is clear.
“There’s no question working from home is a cheaper option for many employees — especially in the capital cities,” he says.
“There’s no tolls, no public transport fees, cheaper lunch, and you can get away with a smaller work wardrobe. Of course, working from home can incur extra costs but these are minimal compared with what it costs to actually physically go into the office each day.”
Undoubtedly, the biggest out- of-pocket expense in the current economic climate when working from home is increased electricity usage and associated bills.
Data from Finder estimates the extra electricity used when working from home will add between $324 in summer and $340 in winter to the average quarterly electricity bill — or an average of around $110 per month.
“You can claim a portion of those costs through tax, but the rules around that are being tightened this year,” warns Kidman.
According to figures from the ATO, almost nine million Australians claim about $22 billion worth of work-related expenses, many relating to working from home.
Other costs to consider in an home office include furniture, equipment, and software. However, according to Kuestenmacher, companies will often foot part of that bill for employees.
Further, experts say the savings associated with working from home are not just financial.
“One of the drivers for people to continue working from home is the cost of lost time that many people experience because of long commutes,” says Dr Penelope Williams from QUT’s Business School and the Centre for Decent Work and Industry.
“For many, the extra time they get back by not travelling to and from another workplace, not only helps them achieve better work-life balance, but also increases their productivity.
“It’s important to consider the financial aspect just as much as the impact of social connections, career advancement, networking and development opportunities.”
That being said, Williams points out that there are physical and mental benefits and challenges for both office and WFH environments.
“It’s really dependent on the needs of the individual and the requirements of the workplace.”
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2 min
The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
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