If you ask someone what they think the biggest benefits of working from home jobs would be they’re likely to talk about being your own boss or working in your pajamas – far fewer people consider the positive financial implications of making home your office. That’s because there’s a big bundle of expenses you outlay on the ‘life stuff’ that surrounds having a job – although not on the job directly.
Take a look at the bigger picture of your working life and think about how much money those in working from home jobs can save when you think about:
- Fuel costs
At the time of writing a liter of fuel costs an average of £1.20 per liter. If your car returns an economy of around 40 miles per gallon of fuel that means a 10-mile commute (the average distance for workers in the UK) costs around £2.70 each day. That might not sound too bad, but with around 260 working days in the year, that works out at over £700 spent at the pumps each year.
As someone who works from home, this can remain as money in your pocket – and you can feel content knowing you’re not contributing the increasing environmental cost of longer commutes.
Saving – £700 (although it could be significantly more if depending on miles and vehicle)
- Car Maintenance
If only the cost of running a car stopped at the fuel! Now, this might not be fully accurate if you run a car anyway – but if your car is primarily for commuting purposes than that previously mentioned average commute is going to put another 5,000 miles on your car each year. Average servicing costs run to around £150 before you’ve had any remedial work done.
Most manufacturers recommend interim services too – which can be another £75-100. If you rely on your car for work, keeping it running and reliable is a must. If you’ve put an older car through a MOT – you’ll also know this cost can vary enormously…
Saving – £250 on servicing + MOT cost
- Lunch costs
Convenience is one of the biggest additional costs we face as workers – and lunch is where the cost of convenience is felt the most. The average sandwich, crisps and drink ‘meal deal’ costs £3.50 – and even if you only go for the out-of-the-office meal deal 2-3 times each week, that still adds up to around £450 each year. If you’re a fan of sushi, pub lunches, and other decadent options then you can multiply that figure by 4 or 5!
Saving – £450 for the 2-3-day meal deal connoisseur
- Clothing costs
Sadly, clothing costs seem to be an area where there’s some significant inequality in the workplace – men report average work clothing expenses to be around £500 each year, where women spend triple that – £1,500. Studies suggest that women feel expected to diversify their wardrobe more than a man might, hence the greater spend.
Now, we’re not suggesting that men or women will spend their days working from home either undressed or in pajamas – but there’s significantly less expectation when you’re not seen by co-workers or clients – meaning far less diversity and formality required. And you can consider the odd pajama day as a perk…
Saving – £500-£1000 on average (differing slightly for men and women)
- Dry cleaning
The reduced requirement for formal workwear means more of your wardrobe can be washed at home – lessening your reliance on dry-cleaning services. Consumer research shows that dry cleaning costs can top £600 for professional city workers. Even if your costs are much lower, that’s a lot of washing liquid and fabric softener!
Saving – an average of around £250 across the UK
- Real working time
The next saving is one that is difficult to calculate as it depends almost entirely on your hourly rate, or if you’re self-employed, your daily output.
The average commute time in the UK is currently around 60 minutes every day – although for around 3 million people that figure is much greater, at around 2 hours each day. Effectively, if you’re adding even 1 hour to your working day that means you’re adding around 200 hours of time that is dictated by your job each year. 200 hours – that’s the equivalent of 5 full working weeks either behind the wheel, on a bike or squashed next to a stranger on the bus or the tube.
If you were to apply that time to work at home, your output would be through the roof – which as a self-employed person mean money – but can mean promotion, pay-rises and other perks for remote company workers.
Saving – the financial equivalent of 200 hours each year!
Oh, you thought we were done with the driving expenses? Sorry to disappoint – but parking can add anywhere between a £3.50 and an astronomical £50 each day depending on where you live and how close to a city center you need to park. Londoners – congratulations, you officially live in the most expensive city in the world when it comes to parking! Not to mention any congestion charge.
Savings – £500+ each year. Londoners – our calculator ran out of space…
- Tax reductions and business expenses
The tax implications of working from home are long and fairly complicated – meaning it’s prudent to get some professional financial advice to ensure the figures you’re working with are accurate for you. Telephone calls using your own mobile or landline phone, heating, lighting and electrical costs are all things which you might be entitled to claim as expenses – and sometimes you don’t even have to have kept records of these costs.
There are also rules around claiming tax relief on other household costs – effectively, if 20% of your home is used as a workplace, then there’s tax relief to be had on 20% of your household costs. If you’re working from home and self-employed, a good accountant will be able to talk you through how to make working from home work for you.
Savings – talk to your company or account for a full breakdown