Guide · Negotiating
Is a raise worth a longer commute?
A new job offers more money, but it comes with a commute. The raise looks good on paper. Whether it actually leaves you better off depends on how much of it the commute eats, in money and in time.
The trade you’re really making
A longer commute costs you twice. You pay for it, in fares, fuel or parking, out of income you’ve already been taxed on. And it takes hours that the new salary now has to cover. A raise only leaves you ahead if it pays for both and still has something left over.
The break-even salary
The cleanest way to decide is to work out the salary at which the new job pays exactly as much per hour as the one you have now. Anything above it is a real raise. Anything below it is a pay cut, however big the number on the offer letter.
Break-even salary = (your current real hourly wage × hours the new job takes + its yearly job costs) ÷ (1 − tax rate)
Here “hours the new job takes” means paid hours plus unpaid overtime plus the commute, and “job costs” means commuting, parking and anything else you’d spend only because of the job.
A worked example in Toronto
Say you work remotely in Toronto at the typical local salary of $71,629. With no commute, that pays $27.60 for each hour you work.
A five-day office job reached by TTC adds 477 hours of commuting a year and brings job costs to $4,576. To pay the same $27.60 an hour, it would need a salary of about $93,423, 30% more than you earn now. By car, it would need about $90,468.
So any raise smaller than 30% to go back to the office five days a week would leave you worse off per hour, even though your pay slip would look better.
The break-even in other cities
The same comparison everywhere the calculator covers: a fully remote job at the typical local salary against a five-day office job reached by public transit.
| City | Remote job pays | Office job must pay | Raise needed |
|---|---|---|---|
| New York | $29.58/hr | $109,367 | 27% |
| San Francisco | $34.48/hr | $124,853 | 25% |
| Chicago | $26.93/hr | $92,085 | 25% |
| Austin | $29.02/hr | $92,226 | 24% |
| US average | $27.34/hr | $87,034 | 25% |
| Toronto | $27.60/hr | $93,423 | 30% |
| Vancouver | $27.50/hr | $94,030 | 33% |
| London | £19.76/hr | £64,526 | 30% |
Amounts are in each city’s currency. Each city’s figures and sources are on its city page.
Two things that push the number higher
- Tax on a raise. The formula uses one effective tax rate. In practice, extra salary is taxed at your marginal rate, which is higher, so you need a little more than the break-even figure to come out even.
- Unpaid overtime. If the new job also tends to run late, add those hours. They count against the new salary just like the commute does.
When a longer commute can still make sense
Money per hour isn’t the only thing a job gives you. A role that teaches you more, pays off later in your career, or simply suits you better can be worth taking below break-even. The point of the calculation is to make that a choice you make knowingly, not a surprise on your first long winter commute.