How Much Does Working from Home Cost When You’re Self-Employed

If you’ve been around for a while, you know I love working from home. But I admit that it’s not for everyone.

I’ve been blogging since 2013, and am officially self-employed since 2016 I think.

In my current place, I also have the privilege of enjoying my first ever home office. A room made for personal growth and business, that I got to decorate my way, and which I can enter whenever I feel like and work on whatever I feel like. 

That’s dreamy, isn’t it? It was once just a vision in my mind.

Add to that the soft clothes, no commute, snacks within reach and living your best introvert life. Especially in the cold months of the year. 

It feels like you finally hacked adulthood. But then reality settles in, and you start noticing the sneaky little costs no one warned you about.

It’s the things you notice only once you’re deep into remote life. Some are financial. Some are related to health. All are worth talking about.

So, let’s see how much working from home really costs:

The Hidden Costs of Working From Home

The Upfront Setup Costs

Let’s start with the upfront costs. 

There’s no employer to cover your equipment so you’ll have to take care of that yourself.

You buy gear you never planned for. A good chair, a bigger desk, better WiFi, a webcam that isn’t blurry, a nicer monitor, laptop upgrades or other desk accessories. 

Add to basics such as your phone and lightning.

Suddenly your “free” setup costs a few hundred or even a few thousand. Let’s say $300-$2,000 depending on your industry and the level of comfort you go for.

Ongoing Equipment and Supplies

What about replacing worn gear, getting extra cables, chargers, headphones as well as maintenance and repairs?

This could be printer ink, planners, notebooks, or all the shipping materials if you sell products. 

That would be an average of $20-$60 per month.

Let’s not forget the upgrades that are bound to happen.

A comfy chair looks like a luxury until your back starts complaining. Then you add a monitor, a keyboard, a better mic, maybe noise canceling headphones. One by one, these little upgrades turn into a real investment, and even though they are mostly one-time payments, they add up yearly.

Also read: How Much Does It Cost to Build a Website? (+ My Blogging Expenses)

Software and Subscription Costs

We can’t neglect the different subscription costs that go with working from home and for yourself.

That includes productivity tools, cloud storage, security programs and any other software you may need for your business.

This can easily add up to $15-$80 per month.

For me as a blogger, for example, that list of expenses includes:

• Web hosting (WPX);
• Email marketing software (Flodesk);
• My course hosting platform (Podia);
• Web design tool (Canva):
• Pinterest Analytics and keyword research (PinClicks).

Higher Home Utility Bills

Next on the list of the costs of working from home are your utility bills.

You’re plugged in all day. Laptop, lights, chargers, heater, AC. It adds up fast, especially in winter or summer. As a result, your electricity bill climbs.

Add to that:

• Heating and cooling;
• Water;
• High speed internet strong enough for calls, uploads, or large files.

The average cost could be $40-$150/month. Switching Rhythm Energy plans could result in significant energy savings.

Business Operations Costs

Running a home-based business means more than just showing up at your desk. You have legal, professional, and operational expenses that keep your business running smoothly.

For example:

• Business license fees – Depending on your location and industry, you might need a local, state, or federal license. Some renew yearly, some every few years, and skipping them isn’t an option if you want to stay legit;
• Professional memberships – Joining associations or networking groups can give you credibility, resources, and connections. Many come with a monthly or yearly fee, but they can pay off through clients or learning opportunities;
• Payment processing fees – If you accept credit cards, PayPal, Stripe, or other platforms, those small percentages add up over time. In my business, every month I ‘lose’ a lot in PayPal fees or processing fees from other transactions related to payments. 
• Business phone number or VOIP – Keeping your personal number separate from your business is smart for professionalism. VOIP plans are inexpensive but essential for client communication.

That might cost you $10-$100 per month.

Grocery and Lifestyle Shifts

What about food?

At home the kitchen calls your name. You snack more. You cook more. You spend more on groceries without realizing. That can be $40-$150 extra per month.

Health and Wellness Costs

More sitting, fewer steps, and lots of screen time can take a toll. Back pain, tension headaches, and general fatigue pop up more often. Investing in health becomes part of the picture, from ergonomic gear to health checkups.

So add another $100-$500 per year to your health and wellness budget.

That could be ergonomic upgrades, medical visits for back or neck strain, and fitness solutions to replace movement.

Taxes and Financial Admin

This list won’t be complete without talking about taxes and bookkeeping.

Depending on where your business is registered, you may pay quite a lot in taxes. We won’t add that itself as a cost in this list, but there’s some work related to tax prep and you may need help.

The first ever business expense I had was my bookkeeper. I’ve had him since day 1 (both in my home country and when moving my online business to the Netherlands). That currently costs me €800/year, and I’m one of their smallest clients.

Even if you do bookkeeping yourself, you might pay for tax software to make sure everything is accurate and compliant. 

Apps like QuickBooks, FreshBooks, or even simpler tracking tools help you log expenses, organize receipts, and generate reports. Some are subscription-based, but they save time and headaches.

That could be $150-$1,200 per year depending on whether you DIY with software or hire a professional.

Insurance and Financial Protection

When you’re self employed, your income isn’t guaranteed, and your home doubles as your office. That makes financial protection essential.

You may need some sort of insurance, such as:

• Liability insurance: If you provide services or sell products, liability coverage protects you if a client or customer claims you caused them harm or financial loss. Even a small accident could get expensive without it;
• Disability coverage: If you get sick or injured and can’t work, disability insurance replaces part of your income. For self employed people, it’s often the only safety net;
• Income protection: This can include business interruption insurance or policies that cover lost revenue due to unforeseen events;
• Emergency fund: Beyond insurance, having 3–6 months of expenses saved can keep your business afloat when surprises hit;
• Insurance for caregivers: For self employed people supporting family members, some look into caregiver-focused policies to cover health or care costs, reducing financial stress.

Average cost: $20-$100 per month depending on the policies and level of coverage you choose.

Professional Development and Education

Self-employed life means you’re responsible for growing your skills, staying current in your field, and finding ways to stand out. So let’s add that to the list of potential costs for working from home.

That could look like:

• Online courses: Platforms like Skillshare, Udemy, or niche industry courses can teach new skills or tools. They’re often cheaper than formal education but still add up over the year;
• Coaching or mentorship: Investing in a coach or mentor can speed up your growth, help you avoid mistakes, and provide accountability. Fees vary, but the long-term return can be worth it;
• Books and workshops: Sometimes knowledge comes in smaller doses. Books, guides, and local workshops can give new strategies, networking opportunities, or fresh inspiration.

Average cost: $50-$500 per year depending on how many resources you invest in and your chosen level of learning.

Working Outside of Home

Working from home isn’t just about money, it’s also about your mental space, creativity and productivity. After all, we need to do what’s necessary to enjoy our work and feel good about our business while still getting things done.

Over time, your whole home can become your office.

Every corner of your house can start feeling like work. Dining tables, couches, even bedrooms turn into “office space,” which can be draining.

You may need to be out of this environment to find work-life balance or just be around people and have somewhere to go.

Some self employed people invest in coworking spaces to create boundaries, boost focus, or simply change the environment.

I go to cafes or the city library, and there are some periods in which I do it a couple times a week. It really helps me get a lot done, and I feel like I had a productive day. 

But the costs add up, of course. You may use public transport to get there, order food and drinks or pay a fee for a coworking space.

That might be $20-$300 per month.

The True Cost is Manageable, Not Free

Working from home and for yourself is great, but it’s smarter when you understand the full cost and budget for these expenses.

It took me many years to get used to it and take control over my finances, as well as separate business and personal ones. It’s still tricky and I need to stay aware of it, which is why I often review my numbers throughout the month, and do a monthly review at the end of it.

Now that you have an idea of how much working from home may cost you, what do you think?

There are always ways to be frugal about it but you’ll have to plan well. Budget for tools, protection, and personal growth. Set boundaries to protect your space and mental health. 

With the right preparation, the freedom of self employment becomes sustainable, rewarding, and truly worth it.

You’re not just paying bills, you’re investing in a business, your well being, and your future.