The remote work cost calculator above sets the annual employer cost of a desk-based role against the same role worked from home, line by line, and reports the difference per person and across the group. It contains no prices. Property costs, stipends, equipment lives, travel fares and IT rates vary so much by city, sector and company that any figure baked into a page like this would be misleading somewhere, and probably everywhere.
Arb Digital builds free calculators that take their inputs from the reader rather than inventing them. What this page adds is structure — the set of lines that actually differ between the two arrangements, arranged so that the comparison is like for like and the ones people forget are hard to skip.
What This Remote Work Cost Calculator Does
It compares only the costs that change with location. Salary, employer taxes, benefits, pension and insurance are deliberately excluded from both sides, because they are the same whichever arrangement you choose and including them buries a real difference of a few thousand inside a total of tens of thousands. Salary appears only as a denominator, so you can express the location cost as a share of pay.
On the office side it totals space, running costs, on-site equipment, commuting or parking support and on-site perks. On the remote side it totals a home-working stipend, home equipment, connectivity, any coworking allowance, travel to company sites and the extra IT and security that distributed working tends to add. The headline is the difference per employee per year; the grid gives both totals, the difference across everyone in scope, and the gap as a percentage of salary.
The boundary with our employee cost calculator is worth stating clearly, since it is the closest live tool. That page computes one fully loaded cost of employment — salary plus taxes, benefits, variable pay and overhead — and returns a single number and a multiplier over base salary. It does not compare locations. This page does nothing but compare locations, and deliberately leaves out everything that does not differ between them. Our commute cost calculator covers the third party in this arrangement, the employee, whose costs move in the opposite direction and do not appear on an employer’s books at all.
How to Use It
- Set the headcount in scope and an average base salary. Run one team at a time if their arrangements differ; averaging across very different roles produces a number that describes nobody.
- Fill in the office side from your lease and facilities ledger rather than from memory. Area per person should include the shared space your allocation actually pays for.
- Fill in the remote side, spreading equipment over a realistic replacement life and including shipping both ways.
- Enter travel to company sites honestly. Trips multiplied by a realistic all-in cost per trip is usually the largest single remote line.
- Read the difference per employee, then the total. Decide separately whether the non-financial factors point the same way.
The Formula and How It Is Calculated
Both sides are simple sums, and the comparison is their difference:
Office = (area × rate) + running + on-site equipment + commuting support + perks
Remote = stipend + home equipment + connectivity + coworking + (trips × cost per trip) + extra IT
Work through the defaults. On the office side, 120 units of area at 40 per unit is 4,800, plus 1,800 running, 600 equipment, 1,200 commuting support and 700 of perks, giving 9,100 per employee per year. On the remote side, a 500 stipend, 700 of equipment, 600 connectivity, no coworking, four trips at 450 for 1,800, and 300 of extra IT, giving 3,900.
The difference is 9,100 − 3,900 = 5,200 per employee per year, and across 25 people that is 130,000. Against a 70,000 salary, the office arrangement costs 13.0 per cent of pay in location costs and the remote one 5.6 per cent, a gap of 7.4 percentage points.
Notice what the arithmetic does not say. It does not say remote is cheaper in general; it says these figures produce that result. Change the travel line to monthly trips and the gap closes sharply. Change the property rate to a small-town figure and it closes too. The value of the tool is that it makes those levers visible rather than hiding them inside an average.
The Lines People Leave Out
Comparisons like this go wrong through omission far more often than through arithmetic, and the omissions are predictable.
Travel is the biggest. A distributed team that never meets tends to become a distributed team with a problem, so most remote arrangements include periodic gatherings — and flights, hotels, meals and the venue add up quickly. Four trips a year at a realistic all-in cost frequently exceeds every other remote line combined. Any comparison that omits it is not a comparison.
Equipment life is the second. Office kit sits on a desk and gets replaced on a schedule; home kit is shipped out, shipped back, sometimes lost, and often duplicated because the person needs a monitor at home and a dock at the hub. The honest remote equipment line is frequently higher than the office one, not lower.
Lease commitment is the third, and it is the one that turns a paper saving into no saving at all. Space costs do not fall because people stopped coming in. They fall when the lease ends, is sublet or is renegotiated. Until then the office line is a sunk commitment, and modelling it as avoidable is the most common error in this entire exercise. If you are asking whether going remote saves money now, use the cost you can actually stop paying this year; if you are asking whether it saves money at renewal, use the full figure and say which question you answered.
Two smaller ones round it out. Hybrid arrangements often carry both sides at once, since a desk kept available for three days a week still costs five days of rent unless the space is genuinely shared. And some costs move rather than disappear — heating and electricity shift from the company’s meter to the employee’s, which is a real cost to a real person even though it leaves the employer’s ledger.
Tax Treatment Is a Question for an Accountant
Home-working costs are treated very differently between countries, and often between an employee and a self-employed person in the same country. Some jurisdictions allow a deduction or relief for a proportion of household costs, some allow a flat rate, some allow nothing for employees at all, and the rules move.
In the United States, the Internal Revenue Service publishes guidance on the home office deduction, with its own tests about exclusive and regular use and different treatment for employees and the self-employed. In the United Kingdom, HMRC’s guidance on claiming tax relief for working at home sets out narrower conditions than most people assume. Whether a stipend you pay is taxable to the recipient, whether equipment provided is a benefit in kind, and whether any of it is deductible to the business are all questions with jurisdiction-specific answers.
None of that is modelled here, and it should not be guessed at. Put the gross figures into the comparison, get the shape of the answer, and take the tax treatment to an accountant who knows the rules where your people actually live — which, with a distributed team, may be several places at once. Payroll and employment status questions travel with it; our payroll tax calculator and contractor vs employee calculator cover the adjacent arithmetic, not the advice.
What the Money Comparison Cannot Settle
The financial gap is usually the least interesting part of this decision, and treating it as decisive is a mistake worth naming.
Retention and hiring reach sit on one side. A remote arrangement widens the pool a role can be filled from and, for some people, is the reason they stay. Replacing an experienced person costs a great deal more than a desk, and our employee turnover rate calculator is the place to size that against whatever the location gap turns out to be. Salary banding by location cuts the other way and can dwarf every line in this tool.
Productivity is genuinely contested and role-dependent, which is precisely why this page does not put a number on it. Some work benefits from proximity, some from uninterrupted focus, and averages across studies say little about a specific team. If you want to measure your own rather than borrow someone else’s conclusion, the productivity calculator gives you the output-per-hour arithmetic to do it with.
Then there are the things that only appear later: onboarding and how new joiners learn, the informal knowledge transfer that offices do accidentally, management overhead, and the cost of running a hybrid arrangement badly, which is often worse than either pure option. The cost of doing business calculator puts the location line in the context of everything else you spend. Use the number this page produces as one input among several, not as the answer.
Arb Digital designs and builds free interactive calculators that show their arithmetic, cite their sources and earn links because they are genuinely useful. Browse what we have already published, or tell us what your audience keeps searching for.
Browse the Free Tools Hub Talk to Arb DigitalCommon Mistakes to Avoid
- Treating lease costs as immediately avoidable. Space costs fall when a lease ends, is sublet or is renegotiated — not when people stop coming in.
- Leaving out travel to company sites. Periodic gatherings are often the largest single remote line, and omitting them makes remote look cheaper than it is.
- Assuming home equipment costs less. Shorter replacement cycles, two-way shipping and duplicated setups frequently make it the more expensive line.
- Including salary and benefits. They are identical on both sides and swamp the difference you are trying to see.
- Guessing at tax treatment. Relief for home-working costs, and whether a stipend is taxable, differ by country and by employment status. That is a question for an accountant.
Related Free Tools From Arb Digital
For the total cost of a hire rather than a location comparison, use the employee cost calculator, and the contractor vs employee calculator for the engagement-model question. The payroll tax calculator handles employer contributions, the employee turnover rate calculator sizes what retention is worth, the productivity calculator measures output per hour and the cost of doing business calculator puts the whole overhead in context. From the employee’s side, the commute cost calculator is the mirror of this page. Everything else is on the free online tools hub.
Frequently Asked Questions
There is no general answer, which is why this page publishes none. It depends on the local property market, the lease, how much shared space is allocated per person, and what the facilities budget covers. Take area per person and the annual cost per unit area from your own lease and add your own running costs; anything else is someone else’s city.
Sometimes, and the size of the difference depends entirely on your figures. Property costs and on-site services fall, while stipends, equipment, connectivity, extra IT and travel to gatherings rise. Where property is expensive and gatherings are infrequent the gap is large; where property is cheap and the team meets monthly it can reverse.
Only the ones that change with location. Salary, employer taxes, benefits and insurance are the same either way, so including them buries the difference inside a much larger total. This tool excludes them from both sides and uses salary only to express the location cost as a share of pay.
Usually not. A lease is a commitment that continues whether the desks are occupied or not, so the saving is realised when the space is given up, sublet or renegotiated. Model what you can actually stop paying in the period you are looking at, and be explicit about which question your figure answers.
That depends on the country and on whether the person is an employee or self-employed, and the rules change. The IRS publishes guidance on the home office deduction in the United States and HMRC publishes conditions for tax relief on working at home in the United Kingdom, and the two are not alike. Whether a stipend is taxable to the recipient is a separate question again, and both are matters for an accountant.
Carefully, because hybrid frequently carries both sides at once. A desk kept available for a person who attends three days a week still costs five days of rent unless the space is genuinely shared or hot-desked at a lower ratio. Model the office side at the space you actually pay for rather than the days it is occupied.
They move in the opposite direction and do not appear on an employer’s ledger. Commuting, parking and time fall; heating, electricity and space at home rise. That shift is real to the person even when it is invisible in this comparison, which is one reason stipends exist. The commute cost calculator covers that side.
No, deliberately. The evidence is contested and strongly role-dependent, so any coefficient built into this page would be a guess dressed up as data. If productivity is central to your decision, measure your own output per hour rather than importing an average from an unrelated context.
This page performs arithmetic on figures you enter and publishes no prices, rates or benchmarks of its own. It is not financial, tax or employment advice. The tax treatment of home-office costs, stipends and equipment differs by country and by employment status and is a matter for a qualified accountant, as are payroll and employment-status questions for staff working in more than one jurisdiction.
