Working from home or the office: what costs more?

Sunday, 11 August 2024

Rising prices have made most people’s daily excursion into the office more expensive, but opting to work from home is not necessarily a cheaper option.

The cost of living crisis is squeezing budgets nationwide, and that means people are looking for the most cost-effective ways to do things. Avoiding commuting costs by working from home could be one option.

And, thanks to the pandemic-driven rise in flexible working these days, it's an option that is available to more people than ever before.

But what does that mean when it comes to the costs of working, and is it really cheaper to work from home?

The Sunday Star Times enlisted a full-time office worker, a hybrid worker, and a full-time remote worker to track their work spending over a week to see how their costs compared.

Here’s what we found out.

The full time office worker

Alka Prasad is a business journalist for the Stuff mastheads team. She works from the Stuff office in Ponsonby in Auckland and commutes from Kingsland.

Tracking my costs for the week helped me assess what works for my budget, especially as I am transitioning into a new job and flat.

I was surprised by how much I spent going into the office because I generally try to cut costs.

It has made me more aware that buying a coffee because I feel like it drives up my working costs for the week. Food and drinks made up more than 40% of my weekly expenses.

I also learned that public transport costs around Auckland can be unaffordable if you live outside the central city.

I have been working from the office as I’m new to the team, so being there is helpful to figure things out. I’m also a relatively junior reporter and I find it helps to learn from the rest of the newsroom.

On the flipside, junior employees are generally on the lower end of a pay scale, so travel costs can make a bigger dent in your finances.

The benefits of working from home are transport and time savings, as I can start earlier and work more flexibly from home.

I experience more stress when in the office, which means I need to take more breaks. Being at home is less distracting for me and helps me manage my workflow a bit better.

But being in the office is more culturally enriching and helps build stronger connections with the team and better work skills.

The costs of being in the office are offset by savings at home. I worked from home one day, due to sickness, and used more power and my own wifi, and it adds up. Also, I don’t have access to all the systems and technology from my work laptop so working from home limits my capabilities.

It seems there is a cost in keeping any job wherever you work from, and those costs add up for people who are doing it tough at the moment.

Alka’s total weekly costs: $59.40

The hybrid worker

Miriam Bell is a senior business journalist for the Stuff mastheads team. She splits her work time between Stuff’s Ponsonby office and her home in Grey Lynn.

For many years I worked from home, but more recently I have split my work time between home and the office.

That change was because my son is now older and more independent, and I wanted the collegial and creative benefits that come from being in the office.

Working from home can leave you feeling isolated, and it makes the separation between work and life difficult.

Also, an increase in the video used in our work makes being in closer proximity to the technology and visual journalists useful.

But I am more productive at home, as it’s easier to focus, and working from home allows much greater flexibility to deal with family and household commitments.

Being a hybrid worker gives the best of both options.

Working from home, either full- or part-time, was never a cost decision for me, but I always assumed it would be cheaper than going into the office every day. So I was surprised to find that wasn’t the case.

My costs were consistent every day, and my most expensive day was one where I was at home but drove to a hotel launch event.

There is a big qualifier to that outcome. I live less than half an hour’s walk away from the office, and I often walk in. That makes my commute cheap, even when taking the bus. Not having to pay for parking and petrol, or multiple stages on public transport makes a big difference.

But when at home it’s good to get out for a break occasionally, so I often walk to the shops to get a coffee and lunch. That means that unless I take lunch to work, my food costs are generally the same wherever I’m working.

My takeaway from the week was that I spend more than I think, and that I’m lucky to be located close to the office.

Miriam’s total weekly costs: $88.01

The remote worker

Sarina Gibbon is the general manager of the Auckland Property Investors Association. She works full-time from her home in West Auckland.

I have worked from home for over 10 years. Originally, it was a temporary solution while APIA looked for a new office. But as a not-for-profit organisation, which is careful with its members’ funds, the skinny model suited us and we found it enhanced productivity.

Recently, I had my first child, and working from home gives me greater flexibility when it comes to childcare. It also eases that particular cost burden.

I thrive on working from home, and the ability to spread my work across the day, and to take time out to spend with my daughter. But the isolation can get to you, so getting out of the house for meetings is important for my mental health as well as business purposes.

My biggest expenses over the week involved going out for meetings, and were a combination of driving and parking costs and food and coffee. On one day of meetings, my spend was $60.07, but the wellbeing benefits meant it was money well-spent.

A lot of my weekly costs went on food, even when eating at home. I’m a big foodie and cook a lot, and that does cost. Food prices are so much higher these days. It highlights the increased cost of living, which is hurting us all.

I was surprised that my spend was the biggest of the three of us, but I think my transport costs contributed to that. They are relatively high because from where I live, it's a bit of a drive to most places.

I choose to drive rather than use public transport, because it’s more convenient, but knowing that my costs rise as soon as I leave the house means I make sure my meetings are very intentional and purposeful.

But for me the benefits of working from home far outweigh the costs.

Sarina’s total weekly costs: $179.50

So what’s the verdict?

The monetary costs of work depend on individual circumstances.

While our remote worker spent more on the week in question, if she had a job which required fewer in-person meetings and networking that might not have been the case.

Alternatively, if our full-time office worker and/or our hybrid worker lived further away from the office and had to spend more money and time on the commute their costs would have been considerably more.

The cost tracking does highlight that transport costs, whether driving or using public transport, are a significant part of the weekly spend for many workers, even if they are based at home.

There are also non-monetary benefits that come with being in the office for work, and from being at home, and again their weighting depends on the individual and their work and life stage.

That’s probably why the hybrid working model, where employees spend two to three days in the office, is on the rise.

And, on a cost basis, it’s a model that provides greater flexibility and could allow for some cost savings for workers struggling to ease the budgetary pressure.