Accounting For The Cost Of Going To Work

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.

Corporate image consultant Caitlin Stewart says comfort dressing can still be professional for women as well as men.

“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.”

Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market.

The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index.

Energy was the notable exception, gaining more than one per cent as Brent crude traded above US$103 a barrel. Oil had moved higher amid uncertainty surrounding potential US diesel-export restrictions and broader geopolitical supply risks. The move supported energy producers but renewed concern about inflation inputs across transport and the wider economy.

Gold shares were weak even as spot bullion remained historically elevated. The All Ordinaries Gold index fell about 2.25 per cent, showing that equity performance can diverge from the commodity because of valuation, currency, operating and company-specific factors.

Zip was a prominent loser, falling 11.38 per cent after the company reported short sales after the previous close. Nine Entertainment also weakened after UBS analysts warned of near-term revenue challenges associated with its advertising-supported subscription tier.

Premier Investments led larger winners despite caution about the retail environment. Breville, in which Premier owns a significant stake, also appeared among leading movers. In the broader ASX 300 screen, Myer gained 11.43 per cent and MAAS Group rose 7.93 per cent, while Lotus Resources fell 10.53 per cent. These percentage moves should be checked against company announcements and trading liquidity before attributing causes.

The Australian dollar was broadly flat at US70.38 cents. Spot gold was around US$4,280 an ounce, Brent crude approximately US$103.08 a barrel and iron ore near US$96.90 a tonne late in the session.

The rate outlook remains the central domestic catalyst. Labour-market weakness has not eliminated the possibility of an RBA increase next week, leaving banks, listed property and other rate-sensitive sectors exposed to changing expectations.

Market dashboard

S&P/ASX 200: 8,702, down 0.72 per cent.

All Ordinaries: 8,897, down 0.66 per cent.

Best sector: Energy, up more than one per cent.

Weakest areas: Real estate and materials were the major drags; confirm final sector percentages before publication.

Material winner: Premier Investments led the large-company gainers. Confirm its final closing move from the ASX before publication.

Material loser: Zip, down 11.38 per cent.

ASX 300 percentage leader: Myer, up 11.43 per cent.

ASX 300 percentage laggard: Zip, down 11.38 per cent.

AUD/USD: Approximately US$0.7038, broadly flat.

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