Lunch-flation. Soaring gas prices. Updating your work wardrobe. It’s no wonder many U.S. workers are resisting employer demands to head back to the office full-time.
Despite many companies setting April return-to-office deadlines, for the past month, U.S. office occupancy has held steady at roughly 43%, according to Kastle’s Back to Work Barometer that takes into account rates in 10 major cities. Many employees are pushing back against heading into the office not because of rising COVID caseloads, but arguing that their commutes are too expensive. In fact, a recent report from Deloitte found nearly 40% of millennials and a third of Gen Zers report that remote work has helped them save money.
But is working from home really a savings game-changer for most workers?
While working from home means skipping the commute, it’s not free—especially when you take into account rising energy costs. Electricity costs in April alone were up 11% year over year, according to the Bureau of Labor Statistics’ Consumer Price Index.
That increase might not be a big deal when you spend eight or more hours a day at the office soaking up that corporate A/C. But when workers are at home, the cost is on them—and that expense could be significant depending on factors like the size of the home, type of A/C system, and various home maintenance variables like window efficiency. Not to mention the additional costs to power your computer, keep your work phone charged, and maybe even run a printer once a day or so.
During the first four months of 2022, Americans spent an average of $23 more on monthly electricity and gas bills than they did during the same period in 2019, according to data provided to Fortune from bill pay service Doxo. On average, Americans have spent about $156 a month for electricity and $150 a month for natural gas so far this year. Those who use heating oil and propane had even higher bills, averaging $302 a month for their heating expenses in 2022.
Those higher costs weren’t even racked up during the hottest months of the year for most of the country. The U.S. Energy Information Administration reported that during the summer of 2020 when many Americans were under lockdown orders and working remotely, residential electricity consumption was 7.9% higher than in the summer months of 2019. That was the fastest year-over-year summer energy growth since 2010.
This summer, the administration predicts that residential customers will average about 1,050 kilowatt hours (kWh) of electricity use per month between June and August 2022. That’s about 2.9% less than the summer of 2021, due in part to milder temperature forecasts, as well as fewer Americans working from home.
Internet costs can also be factored into WFH expenses. On average, Americans spent about $120 a month on their Internet and cable bills in 2022 so far, according to Doxo’s data, about on par with what U.S. households spent pre-pandemic. That can vary as some workers opted to upgrade their internet connection during the pandemic—making that monthly cost continually higher too.
Cost of commuting is increasing too
While Americans might be spending more for electricity, there’s no denying that soaring prices at the gas pump are taking an even bigger bite out of Americans’ budgets. Fortune calculated the average cost for gas for a five-day work commute was roughly $140 in May, based on average gas prices from AAA, average commute mileage, and typical fuel efficiency for a car. That’s compared to the roughly $90 a month that drivers spent on gas for their commute in May 2019.
That, of course, doesn’t take into account the related costs of car ownership, including maintenance and insurance, which can increase if a car is driven more frequently. Based on AAA guidance, UC Santa Barbara estimates that these expenses can add up to nearly $500 a month. Tolls and parking fees can also increase commuting costs, but those expenses vary considerably.
Public transit is a slightly more cost-effective commute. The average cost of a monthly transit pass is about $67, according to a ValuePenguin analysis of 70 transit systems across the U.S. However, those prices range widely. In New York City a monthly unlimited Metrocard is $127. A monthly unlimited pass for public transit in Baltimore will be $77 starting June 26, 2022.
WFH or RTO, nothing is cheap these days
Ultimately, when you look at the cost of commuting versus the cost of working from home, Americans are paying more in general, and neither option will likely help them save significantly.
That’s especially true given that many companies are now letting work-from-home stipends—which helped cover some of those energy, Wi-Fi, and home-office setup expenses—lapse. About 10% of employers surveyed by WTW in June and July of 2020 provided some type of subsidy to workers to help them manage costs of working remotely.
By February 2021, the Employer Council found, only 3% of employers surveyed were offering their employees a lump sum stipend or reimbursement on home-office equipment. The average stipend was about $66 per month.
Both commuting and WFH expenses vary widely and depend entirely on where Americans live and the strategies they utilize to save money at home or on their way into the office.
Google Maps contract employees, for example, recently pushed back against demands that they return to work full-time. One employee told the New York Times that he’d be forced into a daily 100-mile, four-hour commute. With the average gas price in Washington hitting $5.27 a gallon on Thursday, the commute costs for fuel alone would likely cost over $400 a month.
Yet there are ways to reduce the cost of returning to the office. A worker who carpools with just one other person for the average 41-mile round-trip commute can cut the current monthly average fuel cost from $150 to $75. Taking the bus, train, or subway or riding a bike or scooter to work might also yield some savings, as does searching out the best gas prices using apps like GasBuddy.
On the flip side, the size and location of a home play into how much more you could spend to work from home. Pre-pandemic, cooling a 4,000-square-foot home cost 71% more, or about $114 on average, than a 2,500-square-foot space, according to smart-home energy-monitoring company Sense.
Additionally, Sense found Americans living in states like Texas, Florida, and Arizona pay twice as much to stay cool in the summer as those living in northern states like Maine and Montana. That’s only exacerbated as energy and electricity costs rise.
While many Americans can’t simply pick up and move to reduce their energy costs, there are ways to reduce expenses, particularly around cooling a home. Keeping a home slightly warmer in summer can help bring down cooling costs—each degree you increase the temperature could trim 1% off your cooling bill. Investing in a smart thermostat can also help (and some utility providers even offer rebate programs).
Using a fan and keeping the window shades drawn can also help reduce the temperature inside your home and allow you to use less energy to cool it. Moreover, those common-sense rules about turning off unnecessary lights and devices do actually work.
At the end of the day, for those looking to save money, it’s typically not a simple tradeoff between simply working from home or commuting into the office. But by making small changes to WFH setups and thinking critically about daily commute choices, Americans can stay on top of rising costs—and in some cases even reduce them.
