Fuel and parking are the small part. The hours are the real cost — and they are worth salary.
Total cost per year
$0
Cash cost per year
$0
Hours per year
0
Equal to this much salary
$0
| Component | Amount |
|---|---|
| Miles per year | 0 |
| Vehicle cost | $0 |
| Parking, tolls and fares | $0 |
| Cash cost | $0 |
| Hours spent travelling | 0 |
| Value of that time | $0 |
| Total annual cost | $0 |
| Cost per working day | $0 |
Two numbers, and the second is usually larger. The cash cost is fuel, vehicle wear, insurance, parking, tolls or fares. The time cost is the hours spent travelling valued at your effective hourly rate. A 40 minute each way commute over five days is about 333 hours a year, which at $35 an hour is over $11,000. Most people budget for the fuel and never count the hours.
Work out what the extra commute costs and compare it with the extra pay. An additional 20 minutes each way across 240 working days is 160 hours a year. At a $40 effective rate that is $6,400 of time plus roughly $1,000 in extra mileage. A raise of $5,000 does not cover it. Use the offer comparison tool to put both effects into one number.
The standard approach is to value travel at your effective hourly rate: annual pay divided by the hours you actually work. Some argue commuting is not as unpleasant as working, so a reasonable compromise is to value it at half your rate if you use the time in a way you value, such as audiobooks, and at the full rate if you arrive drained.
Commuting is almost never deductible for employees. Since 2018, unreimbursed employee travel expenses are not deductible on federal returns, and commuting between home and a regular workplace is specifically excluded as a personal cost. That makes commuting cost effectively after tax, which is another reason a lower paid job nearer home can beat a higher paid one further away.