Working from home was supposed to save Americans money, but in most cities it comes with a hidden price tag

For many remote workers, the daily commute has been replaced by a walk to the spare bedroom. But that spare bedroom has a cost, and in some cities, it adds up to thousands of dollars a year.

A new study from allwhere, a remote work IT platform, calculated the true annual expense of working from home across the 50 largest cities in the United States. The analysis combined three costs that most remote workers rarely add up: the portion of their rent or mortgage that goes toward a dedicated workspace, broadband internet and the extra electricity needed to power a home office.

The results showed a 3.2 times cost gap between the most expensive city and the cheapest. A remote worker in New York City pays $5,180 per year in work-from-home costs. In Tulsa, Oklahoma, that figure drops to $1,621. The difference of $3,559 is roughly the cost of a round-trip flight to Europe.

Housing was overwhelmingly the biggest factor. Across all 50 cities, the cost of dedicating roughly 50 square feet of home space to a workspace accounted for 61% of total expenses on average. In New York City, that share reached 84%. In San Francisco, it was 77%.

“Remote work may free you from the office, but it doesn’t free you from local costs,” said allwhere spokesperson. “Where you live plays a much bigger role in the affordability of working from home than most people realize.”

The study ranked cities from most to least expensive and introduced a metric called the WFH Penalty, which measures how much more a remote worker pays in any given city compared to Tulsa. New York City had the highest penalty at $3,559, followed by San Francisco at $2,276, Boston at $2,268, San Diego at $1,667 and San Jose at $1,594.

Regional patterns were clear. The Northeast was the most expensive region for remote work, averaging $3,498 per year, driven almost entirely by New York City and Boston. The West Coast followed at $3,012, led by San Francisco and Seattle. The South averaged $2,089 and the Midwest came in lowest at $1,955.

Internet costs told a separate story. Broadband prices ranged from roughly $600 per year in parts of California to $1,200 in Colorado. In a handful of cities, internet actually outweighed housing as the primary expense. Colorado Springs, Oklahoma City, Tulsa, San Antonio and Memphis were among the places where monthly broadband bills, rather than square footage costs, drove the total.

The distinction matters because most discussions about the cost of remote work focus on what workers save by not commuting. Few account for what they spend by staying home. The study suggests that workers in expensive coastal cities are paying a significant premium for the privilege of remote work, even if they no longer buy a monthly train pass or fill a gas tank.

Among the mid-range cities, Dallas came in at $2,049 per year, Atlanta at $2,212 and Charlotte at $2,110. Detroit, Columbus and Indianapolis all fell below $1,900, offering some of the more affordable conditions for remote work in large metropolitan areas.

The cheapest five cities were all in the South and Midwest. Tulsa led at $1,621, followed by Oklahoma City at $1,639, Kansas City at $1,750, Omaha at $1,754 and Louisville at $1,783.

The study calculated housing costs using median rent data from Zillow, based on 50 square feet of dedicated workspace at local residential rates per square foot. Internet costs were sourced from BroadbandNow and FCC filings. Electricity estimates were based on running standard home office equipment for eight hours a day, 250 days a year, at local utility rates from the U.S. Energy Information Administration. All data was current as of Q4 2024.

The full study with complete rankings for all 50 cities is available at allwhere.co/wfh-cost-study.