Calculate the Cost of Working

The cost of working describes the amount of money you spend trying to perform your job.[1] Calculating these costs can help you evaluate your compensation and can help you negotiate a contract or a salary increase. If you review the cost of commuting, the cost of driving and car upkeep, your income tax contributions, and other monthly expenses like bill payment and groceries, you can calculate the cost of working.


Considering the Cost of Commuting

  1. Evaluate the cost of a commuter pass or ticket. If you commute to work via train, bus, or tram, include the cost of the pass or ticket into your calculations. Some forms of public transportation have a flat fee per ride, while others charge a little less if your purchase a monthly pass. These costs can vary depending on your location. A monthly pass for the subway system in Boston, for example, costs $84.50 each month, or just over $1,000 every year.[2] A monthly bus pass in Savannah, on the other hand, costs $50, or $600 annually.[3]
  2. Think of the hours spent commuting. Whether you drive to work, take the subway, or walk, the time spent commuting should be included in your calculations to discover the cost of working. Even if your company only pays for 40 hours of work each week, you still spend additional time commuting to your job.[4] If your commute is one hour each way, you will average 10 hours of commuting every week. This will mean that you are devoting 50 hours each work to your job.
    • If your base salary is $60,000, you may calculate that you earn $30 every hour if you work 40 hours each week. If your commute adds an extra 10 hours each week, you are really working 50 hours each week, which will decrease your hourly wage to $23.
  3. Measure how many miles you drive to work. If you drive to work, you will need to consider how many miles you spend driving to and from work. The number of miles you drive each day will affect the cost of your car maintenance. Services can include changing the oil, rotating or changing the tires, replacing a battery, and changing transmission oil.[5] The cost of a full service varies depending on your vehicle type and your location, but it can cost around $245 each visit.[6]
    • If your office is 25 miles away, you will drive at least 50 miles in one day. You will average at least 200 miles for each five-day work week, or 1,000 miles each month.
    • Mechanics will typically suggest that you should have your car serviced and have the oil changed every 5,000 miles or every three months—whichever comes first. If you drive 50 miles each day, you will need to have your car serviced at least four times each year, which can cost almost $1,000 each year.
  4. Assess the cost of fuel and your car’s average miles per gallon. The cost of gas and the average distance your car makes on a gallon of gas should be considered. In 2016, the average cost of regular gas per gallon was $2.14.[7] If your car has a 15-gallon tank, it can cost about $32 to fill-up your car. If you fill-up your car twice each month, that can cost you almost $800 in fuel each year.
    • A sport utility vehicle in the U.S. may earn 18 to 26 miles per gallon, while a smaller fuel-efficient car may get 40 miles per gallon.[8] An S.U.V. with a 20-gallon tank that gets 20 miles per gallon can go 400 miles on one tank of gas, while a fuel-efficient car with the same sized tank may get 800 miles.
    • If you travel 1,000 miles each month going to work, you will need to fill-up your S.U.V. 2.5 times, while a smaller car will only need to be filled up 1.25 times.
  5. Consider the cost of parking. If you do not have free parking at your work, you will need to think about how much money you spend each month on parking. Consider the cost of your monthly parking permit, or think about how much you spend at a parking meter every day to determine the cost of parking.
    • If you have to pay a daily parking meter that costs $1 an hour, you will be paying $8 for an average working day, which can total almost $2,000 every year.
    • Perhaps there is a parking building near your employer’s office. If the monthly parking fee is $80 every month, you will need to budget $960 annually.
  6. Calculate your annual commuting expenses. The cost of commuting to and from work can add up quickly when you consider the cost of car upkeep, parking, or a monthly commuter pass. If you drive to work and spent $800 on fuel, $960 on a parking permit, and $980 on basic car maintenance, your annual cost of commuting will total $2,740.

Factoring in Food, Clothes, Supplies, and Equipment

  1. Evaluate your monthly expenses. After you have deducted your taxes from your monthly paycheck, you will need to review the total and evaluate your other costs of living. From this, you will need to deduct monthly expenses such as your rent or mortgage, bills, groceries, insurance, and the cost of commuting.
    • If you earn $45,000 annually after taxes, you are left with a monthly payment of about $3,750. If you budget $1,500 for your rent or mortgage, $250 for commuting, and $500 dollars for all other expenses, you are left with $1,500 dollars from your monthly paycheck.
  2. Assess the cost of work clothing. When calculating the cost of working, it is important to think about the dress code. A U.S. survey showed that half of the respondents spent less than $250 annually on professional clothing, while another 35% spend between $250 and $749. When calculating the cost of working, consider how much you will spend on clothing.[9]
    • Other clothing items aside from business attire should be considered. Factor in the expense of wearing protective clothing for a construction job, for example.
    • If you are an actor and need to purchase clothing for auditions, photo shoots, or performances, calculate how much you pay toward those expenses.[10]
  3. Consider the cost of food. Think about the amount of money you spend each day or week on food. This could include your morning coffee from the café in the lobby, your groceries for making your packed lunches, or the cost of buying lunch in the cafeteria everyday.[11]
    • If you eat out for lunch every day, you could spend $2,500 each year.
    • If you pack you lunch each day, you may spend around $780 annually.[12]
  4. Think about the cost of equipment. The cost of supplies, equipment, or subscriptions you need to complete your job should be considered when calculating the cost of working. If you need a laptop to do work on the road or at home, you will need to factor in the cost of the device, your monthly home Wi-Fi bill, and any in-flight Wi-Fi connections you may pay for while traveling.
    • If you are a doctor, subscribing to an academic journal may be required so that you can stay up-to-date with new procedures and treatments for certain diseases. A digital subscription to the New England Journal of Medicine, for example, can cost you $189 annually.[13]

Thinking About the Tax Implications

  1. Find out what tax bracket you are in. A percentage of taxes is taken out of each paycheck, and that percentage is determined by how much money you earn annually. In the U.S., single individuals who earned between $37,650 and $91,150 in 2016 paid 25% in income tax, while those who earned $190,150 to $413,350 paid 33%.[14]
    • If you are unmarried and earning $60,000 annually, you could be paying $15,000 in income tax every year, which reduces your annual salary to $45,000.
  2. Write off clothing expenses. If you are required to buy new clothing for your job, you may be able to deduct those costs when you pay your taxes. If the clothing is required for you to complete your job and is considered to be in line with industry standards, it may qualify as a business expense.[15] Itemizing these purchases can help reduce the overall cost of working.
    • Be sure to save your receipts for your business attire purchases.
  3. Consider itemizing work equipment. When filing your taxes, think about any equipment or supplies that you purchased to complete your job. This can include laptops or other equipment, home office supplies, dues to professional organizations, or professional subscriptions, like a medical or engineering journal subscription.[16] When itemizing electronic devices, however, it is important to consider how much of your time is spent using that item for work. If you are using it for work 80% of the time, then you can deduct 80% of the cost of that item.[17]

Comparing Two Job Options

  1. Evaluate the commute. If you are offered two jobs, calculate the advantage or disadvantage of accepting a job that has a shorter commute. A shorter commute can help save on fuel costs, which is important to consider when comparing the pros and cons of multiple jobs.
    • Imagine that you have a car that has a 15-gallon tank and gets 20 miles per gallon. If gas is $2.00 per gallon, it will cost you $30 to fill up your tank.
    • You have been offered Job A, which has annual salary of $50,000 and requires that you drive at least 400 miles each week. To commute to this job, you will need to fill up your tank 1.3 times each month. At this rate, you will be spending $468 in fuel each year. Without factoring in other expenses, this will leave you with a salary of $49,532 annually.
    • Imagine that you have been offered Job B, which pays an annual salary of $52,000, but the commute requires that you drive 60 miles each day. In the same car, you will be driving 300 miles each week, or 1,200 miles each month, which will require that you fill up your tank once a week. At this rate, you will be paying $1,560 in fuel each year. Without factoring in other expenses, this will leave you with a salary of $50,440 annually.
    • Although there is a $2,000 pay difference between Job A and Job B, there will only be a difference of about $900 when you factor in the distance and cost of fuel.
  2. Consider an employer’s daycare or pet care benefits. If you have a child or a pet, look into your employer's benefits regarding daycare or pet care. If Job A pays less than Job B but has daycare on-site or allows you to bring your dog to the office, then it may be more economical to accept Job A even if it pays less.
    • Doggie daycare can cost between $12 to $38 each day, depending on your location.[18] To send your dog to daycare 5 days per week, you could be spending $3,120 to $9,880 every year. Imagine that doggie daycare is $8,000 annually in your area.
    • If Job A pays $52,000 annually but does not allow you to bring your dog to the office, you will be left with a salary of $44,000 annually without factoring in other expenses. If Job B pays $50,000 each year and allows you to bring your dog to work, you can save a significant amount of money.
    • The average cost of childcare in the U.S. is $11,666 per year.[19] If childcare is offered in your workplace as an employee benefit, you could save around $12,000 annually. Imagine that Job A pays $60,000 annually but does not offer this benefit, but Job B, which pays $52,000, does. In this case, the cost of working at Job B would be more economical than accepting Job A, even if it does have a lower salary.
  3. Think about the company’s dress code. Accepting a job that has a casual dress code can help reduce the cost of working, particularly if you do not need to buy new clothes and accessories. When comparing two positions, consider if you will need to buy new clothes and accessories, and how much this may cost you each year.
    • Imagine that Job A and Job B have the same commute and similar salaries. Job A will require that you spend $400 in business casual attire annually, while Job B will require that you spend $120 annually for casual attire. Over a five-year period, you could save $1,400 in work clothing if you accept Job B.


  • Talk to your human resources department to see if they offer compensation or other benefits for commuting costs.[20] You company may offer incentives if you carpool, for example, or they may pay for a portion of your commuter pass.
  • Ask your supervisor if it is possible to work remotely one day each week. Commuting to work only 4 days a week can help you save on your annual commuting expenses.[21]