I am working on an app that monitors network usage. However I noticed many ways to do this does not allow exclusion of local traffic (say, Time Machine).
I am lookin
It depends on how you define "local", but a common definition would be to look at the network mask.
For example, if your IP (ie the IP of the interface you monitor is
10.33.52.123
netmask 255.255.255.0
that would mean every IP-packet with both source-IP and destination-IP 10.33.52.xx is local.
I don't know cocoa or objective-c, but you can probably use some of these functions helping you extract the network from an IP-address: http://developer.apple.com/library/mac/#documentation/Darwin/Reference/ManPages/man3/inet_network.3.html