- Employee expenses have traditionally included work-related costs such as commuting, lunch, coffee and apparel. Other common expenses, such as child and pet care, arise outside of work but are still due to employment.
- Remote work can save employees thousands of dollars per year, especially on commuting and child care.
- Employers can also save tens of thousands of dollars per employee per year if they shift to half remote and half in person.
- This article is for business leaders and employees interested in how remote work arrangements save money.
The National Bureau of Economic Research has found that 37% of American jobs can feasibly be done remotely. Location flexibility can be a boon for employees, since staying home can save them money on commuting, child care and more. Employers also stand to benefit: Although they might have less control over a physically distant team, remote arrangements can save them money too. Here’s what employees and employers alike should know.
Work-related employee expenses
These are some common expenses that employees have on a weekly or monthly basis.
- Driving: A 2019 study from the Census Bureau fou9iond that the average American who drives to work spends 27.6 minutes in transit each way. As of early 2021, the American vehicle fleet was averaging 24.9 miles per gallon, according to the Environmental Protection Agency. Assuming highway commutes at speeds of 65 mph, that’s 2.43 gallons of gas per day. So, if the current national average gas price is $3.514 per gallon, that’s $8.53 spent on driving every workday. With about 250 workdays per year, that’s $2,134 per year.
- Public transportation: According to Statista, the average national fare for public transit is $1.52 per ride as of 2020 – that’s $3.04 to get to and from work. With 250 workdays per year, that’s $760. Of course, transit fare could vary dramatically by region and travel distance.
- Lunch: A 2019 QuickBooks survey found that 39% of employees spend $5 to $10 on lunch per day, and another 13% spend $10 to $25. This amounts to $1,250 to $6,250 spent on lunch per year. [Read our QuickBooks review to learn about this company’s accounting software.]
- Coffee: One study from The Perfect Brew found that men spend $1,934 per year on coffee, with women spending $2,327. These figures encompass both home-brewed coffee and drinks bought directly from cafes. A survey from Amerisleep found that finance and insurance employees spend the most money on coffee at cafes, totaling $709 per year.
- Day care: A 2019 report from American Progress found that working families typically spend $250 per week on day care for their children. That’s $13,000 per year.
- Pet care: The average American pet owner spends $111 per month on each of their pets, according to OnePoll survey data. A 2021 MetLife survey found that 38% of pet owners returning to in-person work planned to increase their pet spending. Another 23% said they would take a pay cut to stay home and directly supervise their pets.
- Apparel: In 2019, the U.S. Bureau of Labor Statistics found that the average American spends $1,883 per year on apparel.
When employees have a better understanding of how much they are spending on going to work, it can help them trim costs and make different lifestyle choices if necessary.
Employees who commute to and from your office may spend tens of thousands of dollars per year to accommodate their work outside the home.
How much money remote workers save
The COVID-19 pandemic has led to drastic increases in work-from-home arrangements – and opportunities to assess how much money former commuters can save.
Near the start of the pandemic, Zippia found that remote work could cut employee expenses by $4,600 annually across all categories. A 2021 LendingTree study also found that shifting to remote work helped the average American reduce their debt. Around the same time, Bankrate found that nearly 60% of remote employees discovered that working from home improved their financial situation.
An Upwork survey released six months into the pandemic found that shifting to remote work had already saved the average American $2,000 on commuting. Now that the pandemic has lasted over two years, COVID-era remote work may have saved people $8,000 on commuting.
Employers benefit from work-from-home arrangements as well. A fully remote team eliminates the need for an office and all the overhead that comes with it. Even companies that keep their offices but switch to half-remote, half-in-person arrangements can reduce costs. According to Global Workplace Analytics, this arrangement can save a small business owner $11,000 per employee per year. That’s money you can pour back into your team.
Max Freedman contributed to the writing and reporting in this article.