Is a higher-paying job further away actually worth it?

Extra pay after tax versus extra cost

Start with what the rise actually puts in your pocket. Moving from $80,000 to $88,000 sounds like $8,000 a year, but at 2026/27 rates, after PAYE, ACC and KiwiSaver at 3.5%, it is about $4,940, or $190 a fortnight. With a student loan, it is about $3,980, or $153 a fortnight.

Then work out what the extra distance costs. Say the current job is 10km away and the new one is 30km, so 20km further each way. Five days a week for 46 working weeks is 230 days, and 40 extra kilometres a day adds up to 9,200km a year. At Inland Revenue's running-cost rate for a petrol car, 37c a kilometre, that is about $3,404.

On cash alone, the new job leaves you about $1,536 a year ahead. That is before parking, and before the time.

If you would need a second car, or a newer one, because of the longer drive, use Inland Revenue's full-cost rate of $1.20 a kilometre instead, which includes the fixed costs of owning a car. On that basis the extra driving costs about $11,040 a year, far more than the rise.

Time: ten hours a fortnight has a price

If the new commute takes an extra half hour each way, that is an hour a day, or ten hours a fortnight. Across the year it comes to 230 hours, nearly six working weeks spent travelling.

Valued at your new after-tax hourly rate, about $30.99 on $88,000, those ten hours a fortnight are worth about $310, more than the $190 the rise adds. Even at half that value, the extra time costs about $3,564 a year, which turns the $1,536 cash gain into a loss of about $2,028. You may value commuting time differently, especially if you can read on a train, but it is worth putting some number on it.

The break-even distance

The break-even distance is the extra distance at which the extra pay is used up by the extra running costs. Each extra kilometre each way, driven five days a week for 46 weeks at 37c, costs about $170 a year. So:

With a student loan, the break-even falls to about 23km. Count parking, the time or the full cost of the car, and it falls much further. For most people the time is what decides it, because an hour a day is a large share of the week whatever the running costs.

Hybrid changes the sums

If the new job is hybrid, the commute costs scale with the days you actually travel. With two office days a week instead of five, the extra running cost in the example falls to about $1,362 a year and the extra time to 92 hours. The $4,940 rise then leaves you about $3,578 ahead in cash, with about two hours a week of extra travel.

So before comparing, find out how many office days the new role really expects, and whether that is written into the agreement. A job that is three days a week in the office on paper but five in practice has a very different cost.

Deciding with the Commute Cost tool

Your own numbers will differ from these, so work them out properly: your salary, your car, your distances, your parking and how you value your time. Commute Cost does the whole calculation with no account needed, including your time at a share of your after-tax hourly rate that you choose.

Then set the result against the other differences between the jobs: the work, the manager, flexibility and where each role leads. Our article on the true cost of commuting in New Zealand explains each part of the cost in more detail. In jobtracker.co.nz, each job shows its take-home pay on your own settings, so the extra pay you are weighing is the real, after-tax figure.

Weigh the offer on what it leaves you