Is a Higher-Paying Job Worth a Longer Commute? How to Calculate the True Cost, With a Worked Example

A raise that looks good on paper can disappear on the highway. Here is how to put a real number on a longer commute before you accept an offer.

Is a higher salary worth a longer commute?

It depends on what the extra miles and hours cost you. Add up the yearly cost of driving or riding to each job, subtract it from each job's take-home pay, then divide by the hours you spend working and commuting. The job with the higher number pays you more per hour of your life.

That last step is the one most people skip. A job offer lists a salary, but not the gas, the wear on your car, the parking or the hours in traffic.

This guide is for anyone weighing two jobs, or a new job against a current one, where one pays more but is farther away. It walks through a full example with real arithmetic, explains the tax rules that make commuting more expensive than it looks, and gives you a checklist to run your own numbers.

Why commuting costs more than the sticker price

Commuting has three kinds of cost, and only one of them shows up at the gas pump.

The first is direct cost: fuel, transit fares, tolls and parking. These are easy to see because you pay them every week.

The second is car wear: oil changes, tires, brakes, repairs and the value your car loses as the miles pile up. You don't pay these daily, so they're easy to forget. But a commute that adds thousands of miles a year brings the next set of tires, and the day you sell or trade in the car, closer.

The third is time. An extra 40 minutes a day is more than 150 hours a year for someone who works about 230 days. That's close to four extra 40-hour workweeks, unpaid.

There's also a tax twist. The IRS says in Publication 463 that you can't deduct the costs of driving a car between your home and your main or regular place of work, and that these are personal commuting expenses. It adds that you can't deduct commuting expenses no matter how far your home is from your regular place of work. Parking fees at your workplace are also nondeductible commuting expenses. So every commuting dollar is paid with money that has already been taxed.

That means a raise has to be compared after taxes, while commuting costs are compared at full price. A $6,000 raise doesn't give you $6,000 to spend on gas.

Step 1: Find your cost per mile

Your cost per mile is the most important number in this calculation, and it's different for every car. Here's a simple way to build it.

Fuel per mile. Divide the price of a gallon of gas by your car's miles per gallon. At $3.50 a gallon and 30 miles per gallon, fuel costs about $0.117 a mile ($3.50 ÷ 30). Use your own car's real-world mileage and your local gas price. For an electric car, divide your electricity price per kilowatt-hour by the miles your car gets per kilowatt-hour.

Maintenance and repairs per mile. Add up what you spent on oil changes, tires, brakes and repairs over the past year or two, then divide by the miles you drove. In our example we'll use $0.10 a mile.

Wear on the car's value per mile. This is harder to pin down. One way is to compare what similar cars sell for at different mileages. In our example we'll use $0.15 a mile.

Add them up and our example car costs about $0.367 a mile to drive ($0.117 + $0.10 + $0.15). Your number could be higher or lower. These are example figures, not national averages, so plug in your own.

For a quick sanity check, the IRS publishes a standard mileage rate for business driving each year. It's set for tax purposes rather than for your particular car, but if your own estimate is far below it, it's worth double-checking that you haven't left out tires, repairs or the car's lost value.

Step 2: Turn miles into a yearly cost

Next, figure out how many miles each job adds in a year.

Start with your round-trip distance, then multiply by the number of days you'll actually go in. A full-time job is about 260 weekdays a year (52 weeks × 5 days). Subtract holidays, vacation and sick days. Our example uses 230 commuting days. If a job is hybrid, count only the days you'll be in the office.

Formula: round-trip miles × commuting days × cost per mile = yearly commuting cost.

Add tolls, parking and any transit fares on top. If you'd need a second car, or a newer one, to handle the drive, count that too.

Worked example: $60,000 nearby vs. $66,000 farther away

Meet a worker choosing between two offers. All numbers below are made up but realistic, and the math is shown so you can swap in your own.

• Job A: $60,000 a year, 5 miles from home (10 miles round trip), about 20 minutes of driving a day.
• Job B: $66,000 a year, 35 miles from home (70 miles round trip), about 60 minutes of driving a day.
• Both jobs: 230 commuting days, 8-hour workdays, no parking fees, and the same benefits.
• Car cost: $0.367 a mile, from Step 1.
• Taxes: to keep it simple, we'll assume about 30% of each salary goes to federal, state and payroll taxes. Your rate will differ.

Yearly miles and commuting cost:

• Job A: 10 miles × 230 days = 2,300 miles. At $0.367 a mile, that's about $843.
• Job B: 70 miles × 230 days = 16,100 miles. At $0.367 a mile, that's about $5,903.

Job B adds 13,800 miles a year. Fuel alone for those extra miles is about $1,610 (13,800 ÷ 30 miles per gallon × $3.50). Add maintenance and wear, and the extra driving costs about $5,060.

Take-home pay after taxes:

• Job A: $60,000 × 0.70 = $42,000.
• Job B: $66,000 × 0.70 = $46,200.

The $6,000 raise is worth about $4,200 after taxes.

What's left after commuting:

• Job A: $42,000 − $843 = about $41,157.
• Job B: $46,200 − $5,903 = about $40,297.

Job B leaves this worker about $860 a year worse off, even though it pays $6,000 more. And it costs about 153 extra hours behind the wheel (40 extra minutes a day × 230 days).

Step 3: Calculate your true hourly pay

Dollars are only half the story. To compare jobs fairly, divide what's left after commuting by all the hours the job takes, including the drive.

Formula: (take-home pay − commuting costs) ÷ (work hours + commuting hours) = true hourly pay.

In our example:

• Job A: 1,840 work hours (230 days × 8 hours) plus about 77 commuting hours (230 × 20 minutes) is about 1,917 hours. $41,157 ÷ 1,917 hours = about $21.47 an hour.
• Job B: 1,840 work hours plus 230 commuting hours is 2,070 hours. $40,297 ÷ 2,070 hours = about $19.47 an hour.

On paper, Job B pays more per hour: about $31.73 versus $28.85 using the standard 2,080-hour year. Once the commute is counted, Job A pays about $2 more for every hour of the worker's time. Our guide on converting salary to hourly pay explains where the 2,080-hour figure comes from.

What would Job B need to pay to break even? Working backward, Job B would need to pay about $67,229 just to match Job A in dollars, before counting the extra time. If you're in that position, this is a concrete number to bring to a salary conversation. Our guide on how to negotiate a job offer covers how to ask.

What can change the math

The example above is a full-time, five-day, drive-alone commute. Several things can shift the answer a lot.

A hybrid schedule. Suppose Job B lets the worker come in three days a week, and they work about 46 weeks a year. That's 138 commuting days, or 9,660 miles, which costs about $3,542. Now Job B leaves $46,200 − $3,542 = $42,658, about $1,501 more than Job A. The same job can lose or win depending on how many days you go in, so ask about the schedule in writing.

Pre-tax transit and parking benefits. Some employers let you pay for transit passes, vanpools or workplace parking with pre-tax money. IRS Publication 15-B explains that a compensation reduction agreement lets employers offer qualified transportation benefits on a pre-tax basis, by offering employees a choice between cash pay and the benefit. The benefits that qualify are rides in a commuter highway vehicle (a vehicle that seats at least six adults, not counting the driver), transit passes, and qualified parking on or near the employer's premises. Each has a monthly limit that can change from year to year, so check the current limit on irs.gov. As a rough example, if you spend $150 a month on a transit pass and about 30% of your pay goes to taxes, paying it pre-tax could save about $45 a month, or $540 a year. Publication 15-B also says bicycle commuting reimbursements no longer qualify for this tax break.

Carpooling. Splitting gas and tolls with a coworker can cut the direct cost of a long drive. Publication 463 notes you can't deduct the cost of using your car in a nonprofit car pool, and that if you run a car pool for a profit, you must include passengers' payments in your income.

Employer perks. A commuter subsidy, free parking, a company shuttle or a later start time that avoids rush hour can all change the numbers.

Different benefits. If one job has a richer 401(k) match or cheaper health insurance, that can outweigh a commuting gap. Our guide to understanding your employee benefits shows how to put a dollar value on them.

Common mistakes to avoid

Counting only gas. In our example, fuel was less than a third of the cost of the extra miles. Leaving out maintenance and wear makes a long commute look much cheaper than it is.

Comparing the raise before taxes. Commuting costs come out of after-tax money, so compare them against after-tax pay.

Assuming you can deduct it. The IRS is clear that ordinary commuting between home and your regular workplace isn't deductible, however far it is. IRS Topic 510 also notes that most employees can't deduct unreimbursed car expenses. Self-employed people follow different rules for business driving, but the trip from home to a regular workplace is still commuting.

Ignoring the time. An hour a day adds up to weeks of your year. However you feel about the drive, that time belongs in the comparison.

Using a "best case" drive time. Time the commute at the hours you'd actually travel. A 35-minute drive at noon can take an hour at 8 a.m.

Your commute-math checklist

Work through these steps for each job you're comparing. A simple spreadsheet with one column per job makes it easy to see the result.

1. Write down each job's salary and estimate take-home pay after taxes.
2. Measure the round-trip distance and the realistic rush-hour drive time for each.
3. Count your commuting days per year, using the in-office schedule for hybrid jobs.
4. Build your cost per mile from fuel, maintenance and wear on your car.
5. Add tolls, parking and transit fares, minus any employer commuter benefits.
6. Subtract each job's yearly commuting cost from its take-home pay.
7. Divide the result by work hours plus commuting hours to get your true hourly pay.
8. Note the non-money factors, such as benefits, growth and flexibility.

What to do next

Run the checklist for every offer you're seriously considering, and for your current job too. If the farther job comes out behind, you have options: ask for a higher salary, more remote days, a commuter benefit or a schedule that avoids rush hour. If it comes out ahead, you'll know by how much, which makes the decision easier.

Keep the spreadsheet, since gas prices and schedules change.