Labor Burden in Cabinet Shop Costing

An hourly wage is not necessarily the full cost of employing someone.

Written by Coby BirenbaumPublished Oct 19, 20262 min read

Illustrative photograph of a production manager reviewing job drawings at a workbench

Labor Burden in Cabinet Shop Costing

An hourly wage is not necessarily the full cost of employing someone. A labor-cost model should identify the additional costs included and the hours used as its denominator. Use your own payroll and accounting information, with appropriate professional review, instead of copying an industry percentage.

Define the model

List included employer costs and keep the categories visible.
Decide which hours the rate is intended to cover.
Separate direct labor costs from overhead already allocated elsewhere.
Review the rate when compensation or working patterns change.

Arithmetic example

If an illustrative annual employment cost is $60,000 and the chosen recoverable production-hour base is 1,500 hours, the resulting rate is $40 per hour. Changing the denominator changes the rate, so document why that hour base fits the model.

Avoid double counting

Check whether benefits, supervision, or other costs already appear in overhead. The same expense should not be recovered twice without an intentional and clearly defined calculation.

Definitions and further reference

Intuit: job costing and cost records

How Millbase can help your shop

Bring job-cost reviews back to the recorded work

Use Millbase project tracking to keep a cabinet job and its sub-projects together, then compare estimates with recorded labour and material costs. Insights and reports help the team inspect the people and workstations behind a total and export supported results for the next review.

Ask the Millbase AI agent a question grounded in your workspace records. For example: “Compare this project’s estimated and actual labour, then break the logged hours down by workstation.” You can select a project or worker, ask follow-up questions, and request supported reports and CSV exports.

Check the date range, job scope, and recorded inputs before changing a quote. Keep the accounting treatment of overhead, tax, and revenue in the appropriate financial process; a shop-floor cost breakdown is only as complete as the inputs recorded.