How this instrument works
The number this instrument produces is a single dollar figure — the gap between housing a worker at a desk in a leased or owned building and letting the same worker operate from home with an allowance instead. It is not a verdict on which arrangement gets more done; it prices only the facilities side of the choice, the line a finance or real estate team can actually enter on a spreadsheet next to headcount plans.
Office overhead, % of salary stands in for everything a company pays only because a person occupies a desk: rent, utilities, furniture, cleaning, security and a share of IT support, expressed as a percentage of salary so it scales sensibly across pay grades. Workplace-strategy teams typically build that percentage from the building's total occupancy cost divided by headcount — it commonly lands anywhere from the high teens to well above 40 percent depending on the market and how much square footage each person gets.
Remote work stipend, $/year plays the opposite role on the other side of the ledger: it is usually the only extra cash a remote arrangement adds, covering things like home internet, a monitor or a coworking day. Everything else — base pay, benefits, payroll tax — is treated as identical in both scenarios, which is deliberate. Strip those shared costs out and the instrument isolates exactly the one variable that changes when a role moves off-site.
- Enter the Base salary, $ for the role being compared — the figure before overhead or stipend are added.
- Set Office overhead, % of salary to the facilities load your own finance team uses: desk space, utilities, supplies, IT.
- Enter the Remote work stipend, $/year you would pay a home-based worker doing the same job.
- Read Total cost, office worker, $ and Total cost, remote worker, $, then check Savings per remote worker, $ for the gap.
Worked example — the $80,000 role
Take a role with a Base salary, $ of 80,000 and Office overhead, % of salary set to 25. The office side of the formula runs 80,000 × (1 + 0.25) = 100,000, which lands in Total cost, office worker, $. That 25-point premium stands for desk space, utilities, supplies and the other per-head facilities costs a company carries for anyone who shows up to a leased or owned building.
The remote side skips overhead and instead adds a Remote work stipend, $/year of 3,000: 80,000 + 3,000 = 83,000 for Total cost, remote worker, $. Subtracting the two gives a Savings per remote worker, $ of 17,000 — real money a company keeps per remote hire under these assumptions, before anyone weighs output, retention or collaboration.
Questions
What counts as office overhead?
It is the per-employee share of costs that exist only because someone occupies a desk: rent or mortgage on the space, utilities, furniture, supplies, cleaning, security and often a slice of IT and facilities staff. Real estate and finance teams usually divide total occupancy cost by headcount and state it as a percent of salary — the 25% default is a common mid-range estimate, not a fixed rule for every building.
Why is the stipend the only remote-side cost?
Because base pay is treated as identical in both scenarios, this instrument isolates the one line that actually changes. A remote arrangement typically adds cash for home internet, a desk or monitor, and sometimes a coworking membership, bundled into one annual Remote work stipend, $/year figure. Payroll tax, benefits and equipment refresh cycles are assumed equal on both sides and left out on purpose.
Can the savings number come out negative?
Yes, and that is a legitimate result, not an error. Set Office overhead, % of salary to 0 with the salary and stipend defaults and the office side drops to $80,000 against $83,000 remote — a $3,000 disadvantage for remote work. The sign of Savings per remote worker, $ depends entirely on how large an overhead rate you enter, which is the whole point of testing it.
Where does a 25% overhead figure come from?
It is a placeholder, not a benchmark for any specific company. Workplace-cost studies have put fully loaded office occupancy anywhere from under 15% of salary at a lean, low-cost site to well over 40% at a dense downtown headquarters with generous space per person. Swap in your own finance team's per-desk cost divided by average salary before treating the output as a real decision input.
What does this comparison leave out?
Everything beyond direct facilities and stipend spending: recruiting reach, productivity, collaboration quality, retention, commuting costs the worker absorbs, and any tax-treatment differences between a stipend and office costs. The result is a facilities-cost delta only — one input for a real estate or staffing decision, not a full business case by itself.
Can I use this for a whole team instead of one worker?
Yes — Savings per remote worker, $ is a per-head figure, so multiply it by headcount to size a team or department. Because overhead and stipend assumptions rarely hold flat across seniority levels or cities, running the calculation separately for each salary band gives a more honest total than applying one blended figure to an entire roster.
References
- IRS Publication 15-B — Employer's Tax Guide to Fringe Benefits
- U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation
- U.S. Small Business Administration — Calculate your startup costs
Read this first: This instrument shows arithmetic, not advice. Real offers add fees, taxes and terms that vary by lender and place — verify the figures against your actual paperwork before deciding anything.