A 10% raise that lowers your real hourly wage by 4%
When a job offer arrives, you compare salaries first. But a salary tells you how much you are paid, not how much time you spend earning it. Once the commute is counted, the ranking can flip.
What is a real hourly wage
A real hourly wage is annual pay divided by work hours plus commute hours.
Real hourly wage = annual salary ÷ (annual work hours + annual commute hours)
The time it takes to get to work counts as a cost of doing the job, alongside the time spent at work.
A 10% raise that becomes a lower hourly wage
Compare two setups. Both are five days a week, 40 hours, 15 vacation days.
| Current job | Offer | |
|---|---|---|
| Salary | 40,000,000 | 44,000,000 |
| Daily round-trip commute | 60 min | 140 min |
| Annual work hours | 1,960 | 1,960 |
| Annual commute hours | 245 | about 572 |
| Real hourly wage | about 18,141 | about 17,380 |
The salary rises 10%, but the commute grows by 80 minutes a day, roughly 327 more hours a year. The real hourly wage falls about 4.2%. You earn 4,000,000 more, and spend about 13.6 additional days a year in transit to get it.
What else to include besides salary
Commute time moves the wage most. As above, a 30-minute daily difference adds up to thousands of hours over 30 years. Its lifetime scale is worked out in A two-hour daily commute costs you about 1.7 years.
Weekly work hours matter too. Two jobs with the same salary can have very different hourly wages if one runs long hours. Five extra vacation days reduce both work days and commute days, and the calculation reflects that.
What this calculation leaves out
The calculator uses pre-tax salary and ignores taxes, benefits, growth, and how much you like the work. A 4% lower hourly wage can still be a good move if the role teaches you what you want to learn. What is worth checking is the assumption that a higher salary cannot be a loss. Commute time can make it one.
Frequently asked questions
If the real hourly wage drops, should I turn the offer down?
Not necessarily. It is one input. Weigh it against growth, stability, and the nature of the work.
How do I handle remote work?
Enter only the days you actually go in as office days per week. Two remote days a week means three office days, and commute time shrinks accordingly. Keep weekly work hours at your full total, remote days included.
Can I compare after-tax pay?
Yes, as long as both jobs use the same basis, before tax or after.
To compare your two options directly, use the Job-change value calculator.