Improving urban productivity is central to the Australian Government’s Smart Cities agenda. Urban productivity is fundamentally related to the capacity of firms to access high quality labour pools and in turn for workers to access optimal employment without high costs. Yet Australia lacks systematic analysis of how current urban structure and the cost of commuting would enhance or inhibit urban productivity. In this paper, a spatial model was used to understand the relationships between jobs, labor mobility, and commuting costs for workers of a range of industry and occupational groups in Melbourne. Based on the analysis of workers’ commuting costs and the value of the work (wages), we identified that workers are able to earn their wages for low commuting cost is likely to be more productive in terms of the use of time, energy and infrastructure. In contrast, other groups which incur a high cost for work travel but generate low wages are considered to detract from urban productivity. The understanding the productivity of commuting is essential to appraise urban planning and investment strategies to improve urban productivity. This includes alternative approaches to invest transport infrastructure and new employment centers that can alter commuting patterns.