How Much is Your Job Costing You?

You have a job to make money, right? On the surface, that?s what seems to be happening. But just like any money making venture, there are costs incurred to produce that income. Most of us don?t think of these as business expenses, and the IRS won?t even let us deduct most of them to prove it. But that doesn?t mean that jobs don?t cost money?they do. How much is your job costing you?

One of the misconceptions about having a job is in thinking you aren?t in business?you are. And just like any business, you have income?your salary?and expenses, which we?ll cover in some detail.

Even if you have a job, you?re still in business, only with a job your income comes from a single client.

What are those costs?

Extraneous/uncompensated time

How Much is Your Job Costing You?
How Much is Your Job Costing You?
My wife works an eight hour day, but the day is actually a good deal longer than eight hours. She leaves the house at 7:45 in the morning, and doesn?t get home until 5:45 in the afternoon. By my calculation, that?s a ten hour day. Or 50 hours per week. Or 200+ hours per month. By any measure, that?s a lot of time devoted to ?an eight hour day?.

I suspect that?s the situation for most full time workers. It?s not just the time spend at work, but also the time commuting?both ways?plus lunch, and even more so if you have overtime or off hours work functions. This extra time, over and above the regular work schedule, and generally uncompensated, is an extra cost of holding a job.

So just hypothetically, if you make $20 per hour on your job, but you have to spend 10 hours on your eight hour job, you?re out $40 per day for the extra two hours of uncompensated but totally necessary work related time. In the course of a year that?s over $2,000!

Paying others to do what you don?t have time for

Another time related cost here. While you?re working, you have less time to do what ever needs to be done with the rest of your life. Most likely, you?re paying others to take care of that for you. It may be paying someone to care for your children, to clean your house or to cut the lawn. All of that costs money and you may have to pay it because you simply have no time left.

Can we put a dollar figure on that? Not here, because it all depends on how many services you pay others to do. I?d guess though that it?s well into the thousands for an average person, at least on an annual basis.

Extra wardrobe

Holding a job usually means spending more money for clothing. Most employers have some sort of dress code, and even if it?s a casual one, it?s likely more formal than what you wear around the house. And then there are the dry cleaning bills?

Again, how much you spend here depends on individual circumstances. Some employers enforce stricter dress codes that are more expensive for their employees. Some employees even like the formality and over-comply. However it plays out, you?re spending more money as a result of your job.


This is the most obvious cost for a job. Whether you drive your own car to work every day or take public transportation, it costs money to get to your job each day.

How much? The IRS allows up to 55 cents per mile as a reasonable estimate of the cost of running a car. That includes gas, maintenance, depreciation and wear and tear. To get an idea what it costs you to commute to work and back each day, just take your round trip commute, multiply it by five days for a week, then again times 50 weeks to come up with a reasonable estimate of your commuting costs.

If you travel 20 miles round trip, or 100 miles per week, or 5,000 miles per year, you?re spending about $2,750 each year on commuting. And that’s not tax deductible either.


Most of us don?t think of this as a job related cost but it is. Many people eat lunch in restaurants each day, and even if you only eat in fast food places at $5 per day, you?re still spending about $1,300 each year just to buy your lunch.

If you were working from home, you?d probably just get up and make yourself a sandwich at lunchtime?that?s what I do. Sure there?s a cost to that, but it?s a lot lower than $1,300 a year.

rrrrrrrrrrr S-T-R-E-S-S !!!

Whether you work at home or in an office, there?s stress. After all, work is work and there?s a paycheck attached to it, and that means stress. But when you work in an office you have to deal with office politics, close supervision and time wasting meetings. You also have to deal with the aforementioned commutes and company dress codes.

Though it?s hard to measure stress in monetary terms there definitely is a financial cost. Stress causes more trips to the doctor, greater reliance on medications, more meals out (?I just don?t have time to cook tonight?) and more money spent on activities meant to decompress. The range of possibilities is endless here, so coming up with even a rough estimate is virtually impossible.

Opportunity cost

This one isn?t monetary but it may be the biggest cost of all. Opportunity cost is what you?re not doing while you?re doing something else.

If you enjoy your job and the work that you do, there probably is no opportunity cost. But if you find your work to be boring and unfulfilling, and something you do only to pay the bills, you?re mostly going through the motions. What else could you be doing to earn a living that might make you feel good about your work? The answer to that question defines your opportunity cost.

You could be working for yourself, or you might be working in a job that while it doesn?t pay nearly as well as your current job, it would be much more fulfilling and enjoyable for you. Which begs the question: now that you have some idea what your job is costing you?and maybe even realizing for the first time that it even is costing you?what might you do about it?

( Photo from Flickr by FontFont )

6 Responses to How Much is Your Job Costing You?

  1. What I am doing with my “freelancing” is having folks “prepay” for my transportation and lodgings before I leave for my projects. This is only when the project is not “virtual”…

    This way I avoid having to wait and pray I get reimbursed(lol).

    I rather folks be honest and let me know what they can afford and then I can decide if I can afford to pay my own transportation and lodgings.

    Bottom line, if you need income – whether it comes from a 9 to 5 job or some other source – decide what you need the outcome to be. In my case right now, being in my 50’s and laid off since 2008 – I have learn’t that the area I am now living in – Columbus, Georgia – is not going to support me with a paycheck. Maybe sometime down the path, it will – but until then, I travel to the work.

    I just came back from an AWESOME working vacation in Atlanta, Georgia and got blessed with a check for $200. I took this project based on my client being willing to pay for my transportation to Atlanta and my accommodations for 5 days. We never discussed payment, when asked, my response was – if you feel you need to pay, whatever you want. LOL, my other half was not happy about this as he felt I should have asked for $500 or more. Yes, we need the cash badly – but this is a “ministry” and I thank God DAILY for taking care of my needs.

    Angela J. Shirley
    “How To Survive Unemployment”

  2. Hi Angela–You’re highlighting two of the advantages to freelancing–1) being able to negotiate your own compensation and 2) geographic mobility. There are times when the economy of an entire city, metropolitan area or even a whole state can go quiet. There’s nothing to be had anywhere in the way of steady employment. As a freelancer you can follow the work where ever it is. You’re also able to negotiate terms, which means you might be able to work for less or under more favorable terms. That can be the difference between having work and having nothing.

    If it’s any consolation, I think freelance gets easier the longer you do it. You build up more contacts and referrals and you know how to make them work. In a real way though it’s like learning how to work all over again. But once you master it you’ll have created a whole new way to work that can be more secure than a steady job, if only because steady jobs are getting harder to find.

  3. Good post Kevin! My wife has been running a business for three years or so and I left my job almost a year ago to help her run it and many of these things are regularly on my mind. We find a lot of what we’re learning comes down to our time. We want to make sure that there is little fat and that we’re maximizing our time. That includes not wasting time and outsourcing those things that are cost feasible. You really do have to look at your career, regardless of what it is, as your business and find ways to maximize it and make it more efficient.

  4. I agree John, there are costs associated with a job or a business, and as ordinary as they seem, they’re still reducing cash flow. I think this is actually even more important with a business, because time management is such a critical factor.

  5. This post points out some excellent points. One good point I would like to make is, when you are considering taking a job, you have to think about these costs,and you have to consider adding these or negotiating these costs into your salary before taking a job.

  6. That’s an excellent point Jeff. I’ve seen people commute 30 miles each way to a job that pays $30,000 per year. You have to wonder if the time, gas, and wear and tear on your car is really worth that kind of pay.

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