The true cost of commuting in New Zealand: how to work it out
The true cost of a commute is the running cost of the car or the fares, plus parking, plus the hours it takes, valued at what your time is worth to you. Fuel is only one part of it. For someone on $80,000 who drives 25km each way and pays $15 a day for parking, the cash comes to about $7,705 a year, and counting the time at the full after-tax hourly rate takes it past $17,000.
Fuel is only one part: running costs, parking and time
Most people estimate a commute from the petrol they put in the tank. That leaves out much of the cost. A full picture has three parts:
- Running costs: fuel, but also tyres, servicing and repairs, which all rise with the distance you drive. For public transport, the fares instead.
- Parking: often the largest single cash cost in a city centre, and easy to forget when comparing jobs.
- Time: the hours spent travelling, which you are not paid for and cannot use for anything else.
Adding all three changes how jobs compare. A slightly higher salary further away can leave you worse off once the extra driving and the extra hours are counted.
Running costs and the IRD rates
Inland Revenue publishes two kilometre rates each year, and together they give a sound starting point. For the 2025-2026 income year:
| Vehicle | Running costs only (Tier 2) | Full cost of ownership (Tier 1) |
|---|---|---|
| Petrol | 37c | $1.20 |
| Diesel | 38c | $1.30 |
| Petrol hybrid | 24c | 90c |
| Electric | 23c | $1.22 |
The Tier 2 rate covers running costs only: fuel, road user charges where they apply, tyres and maintenance. The Tier 1 rate adds the fixed costs of owning the car, such as relicensing, insurance, interest and depreciation. If you would own the car anyway, the running-cost rate is the fairer measure of what the commute adds. If you own the car only because of the commute, the full-cost rate is closer to the truth.
These rates are for business use, and Inland Revenue treats travel from home to work as a personal trip, so an employee does not claim the commute against their tax. For weighing up a job, though, they are a useful, published benchmark.
Time valued at your after-tax hourly rate
The hours in the car or on the bus have a value. One simple way to put a number on them is your after-tax hourly rate: what an hour of your working time actually puts in your pocket. On $80,000 a year, at 2026/27 rates after PAYE, ACC and KiwiSaver at 3.5%, with no student loan, that is about $28.62 an hour over a 40-hour week.
You may not value every commuting hour that highly. Time on a train can be used for reading or rest in a way that time behind the wheel cannot. Commute Cost lets you choose how much of your hourly rate each hour of commuting is worth, starting at half, and works out the rest with no account needed.
A worked example for three cities
These examples use a salary of $80,000, five days a week for 46 working weeks, the petrol running-cost rate of 37c a kilometre where the person drives, and time valued at the full after-tax hourly rate of $28.62. The distances, times, fares and parking are illustrative assumptions, so put in your own.
| Example | Cash cost | Hours | With time |
|---|---|---|---|
| Auckland: drive 25km, 45 minutes each way, $15 a day parking | $7,705 | 345 | $17,578 |
| Wellington: bus or train, 40 minutes each way, $10 a day in fares | $2,300 | 307 | $11,076 |
| Christchurch: drive 12km, 20 minutes each way, free parking | $2,042 | 153 | $6,430 |
In the Auckland example, parking at $3,450 costs almost as much as the driving itself at $4,255. The Wellington example is cheap in cash but still takes over 300 hours a year. Distance and time drive most of the cost, so a job closer to home often wins on both. At the full-cost rate of $1.20, the Auckland driving alone would come to $13,800.
Putting the number beside each job
A commute cost is most useful as a number you can compare. Work it out for each job you are seriously considering, and put it next to the job's take-home pay. Two jobs that look similar on salary can look very different once one of them costs several thousand dollars a year more to reach.
When you are choosing between offers, bring the commute into the comparison with everything else. Our article on comparing two job offers sets out how to weigh it alongside leave, KiwiSaver and the work itself. In jobtracker.co.nz, each job shows its take-home pay on your own tax settings, so the commute figure has something to be weighed against.
Put the commute beside every job
A jobtracker.co.nz account shows the take-home pay of every job you are chasing, so the commute can be weighed against what each one really pays, and it is free for as long as you are between jobs, with no card needed. If you would rather look around first, the demo opens a full job hunt with no account.
Create your free account