Remote Work Savings: What Your Commute Really Costs

A 12-mile commute each way, five days a week for 50 weeks, costs about $4,560 a year at the IRS mileage rate of 76 cents. Add $5 a day for parking and incidentals and the total is $5,810. Because you pay it from after-tax income, dropping it is worth the same as a $7,747 raise at a 25% tax rate, plus the time back: 187.5 hours a year for a 45-minute round trip.

How Long Americans Commute

The Census Bureau's American Community Survey puts the mean one-way travel time to work at 27.2 minutes in 2024, up from 26.8 minutes in 2023. In 2024, 69.2% of workers drove alone and 13.3% worked from home. At the mean, a round trip is 54.4 minutes, or about 227 hours over 250 workdays.

The Pieces of Commute Cost

The IRS says its business mileage rate "is based on an annual study of the fixed and variable costs of operating an automobile." If you would keep the same car anyway, some fixed costs such as insurance and part of the depreciation don't go away, so your real saving sits between fuel and maintenance alone and the full rate. Commuting is also a personal expense for tax purposes. IRS Publication 463 says you can't deduct commuting costs "no matter how far your home is from your regular place of work."

A Lower Bound: Fuel Only

If you want the most cautious number, count only the costs that clearly stop when you stop driving. At an assumed 25 miles per gallon and $3.50 a gallon, 6,000 miles uses 240 gallons, or $840 of fuel. Add tire wear and oil changes from your own records. The honest answer for most people who keep their car sits somewhere between this fuel-only figure and the $4,560 at the full IRS rate, closer to the full rate if dropping the commute lets your household sell a car or skip replacing one.

Costs Remote Work Adds

• Home energy: heating, cooling and electricity during work hours.
• Internet and equipment: a faster plan, a desk, a chair, a monitor.
• Hybrid schedules: the savings scale with the days you stay home. Three office days a week keeps 60% of the commute cost.

Subtract these from the cash savings before calling the result a raise. Some employers offer a home-office stipend, which offsets part of it.

Hybrid Schedules

Commute costs scale with office days, so a hybrid schedule saves a proportional share. Using the example above:

If your commute is closer to the national average of 27.2 minutes each way, the full-remote time saving is about 227 hours a year rather than 187.5.

Using These Numbers in a Job Decision

When comparing an in-office offer with a remote one, add the equivalent pre-tax raise to the remote salary, or subtract it from the in-office one, and compare the true hourly rates from the calculator. The time saving is harder to price, but it is still worth writing down, since it is time you would otherwise spend unpaid. Check, too, whether the remote role expects you to be in the office on some days, or to travel for meetings, because those trips bring back part of the commuting cost.

What This Doesn't Cover

This guide doesn't compare pay between remote and in-office roles, the cost of moving, or state income tax when you live in one state and your employer is in another. For multi-state tax questions, ask a tax professional.

Sources

• U.S. Census Bureau, Commuting at a Glance: ACS 1-Year Estimates
• IRS, Standard Mileage Rates
• IRS Publication 463, Travel, Gift, and Car Expenses (commuting expenses)