Sleep-ins, zero commutes, and lunch from the comfort of your lounge room — those are just some of the benefits of working from home, a trend that has skyrocketed since the COVID-19 pandemic five years ago.
While it was once a privilege reserved for those in flashy startups or tech companies, working from home has now become the norm and, for some, an expectation.
However, a new analysis shows that while remote work may have plenty of benefits, it might be doing more harm to our hip pockets, with those who work from home being more likely to earn less money than those who don't.
The March 2025 analysis from the Committee for Economic Development of Australia (CEDA) based on Household Income and Labour Dynamics in Australia data reveals people with hybrid or fully remote working arrangements earned 5.8 per cent less than those who didn't or couldn't work from home.
For someone with an average annual pay of $75,665, this almost 6 per cent drop translates to $4,400 less in their pocket per year.
The study compared the wages of people with work-from-home agreements or who worked over 12 hours a week from home to those who did not, using data from 2017 to 2023.
A new CEDA analysis has found Australians who work from home earn 5.8 per cent less than those who don't work from home. Source: SBS News
Over in the United Kingdom, recent research suggests remote workers take home up to 7 per cent lower wages than their colleagues in the office.
But is the trade-off worth it?
Prepared to take a pay cut
In 2024, 36 per cent of Australians were working from home on a regular basis, with flexibility and the ability to choose working hours as the top reasons for the arrangement, according to the Australian Bureau of Statistics.
Graham Wynn from recruitment agency Superior People Recruitment said being able to work from home can sometimes work out more financially beneficial in the long run.
"We just did one [person] recently, where someone was prepared to take a $10,000 drop in their salary to have that work-from-home option because they'd calculated the money they spent on travel into the city, fuel, parking or public transport, cups of coffee in the city, were three times as much as making it at home," he told SBS News.
"They'd calculated that they could afford to drop that $10,000 salary and still be better off."
When you consider some of the figures for returning to the office, the willingness to take a pay cut starts to make sense.
According to data analytics firm McCrindle Research, each year, an average of $2,820 is spent on transport, $2,436 on lunches, $685 on education, and $420 on clothing for the purposes of working. Those juggling childcare spend an additional estimated $12,245 per year.
According to job advertisement website SEEK, over 50 per cent of Australian workers would ideally work from home two or more days a week.
Nearly one in five (17 per cent) of workers who currently have a hybrid working relationship would quit their jobs if their employer required them to return to the office five days a week.
At least 72 per cent said they could be convinced to return to the office full-time if they had a salary increase.
James Brooks, an economist from CEDA, said despite a lower wage on paper, workers may be reaping other financial benefits.
"It's going to make up a slightly reduced wage growth but what workers are doing is that they are reaping financial benefits in other areas of their life," he told SBS News.
"So, people are avoiding costs on childcare and commuting as well as having a bit more time to attend to things around the house," Brooks said.
"Workers are valuing that flexibility and are willing to make a trade-off in their overall salary for the right to work from home."
Increase in labour force participation
There is a specific subsection of people who benefit most from flexible working arrangements, including carers, women with young children, and those with chronic health conditions and disabilities.
"Previous CEDA research has shown that work from home has allowed people who have previously faced barriers to on-site employment to participate in the labour force," Brooks said.
"We've seen their labour force participation really increase as a result of the widespread adoption of working from home."
But productivity still remains an area for concern, despite evidence indicating those working from home are keeping up with their colleagues in the office.
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"The research on productivity and working from home indicates that workers who are in hybrid work-from-home arrangements are at least as productive as their on-site colleagues," Brooks said.
"Additionally, there are benefits to working from home with increased retention of staff, so we'd expect that it will have little impact on productivity, though the long-term effects are largely unknown.
"We know that workers value it and are happier, and now our research has shown that there is a benefit for employers as well."
But as more companies mandate a return to working on-site, the arm wrestle between employers and employees over striking the balance continues.
