# Labor Burden in Cabinet Shop Costing

Canonical: https://millbase.ca/blog/labor-burden-in-cabinet-shop-costing
Author: [Coby Birenbaum](https://www.linkedin.com/in/cobybirenbaum/)
Published: 2026-10-19
Updated: 2026-10-19
Archive edition: 2026-06-11

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

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](https://quickbooks.intuit.com/learn-support/en-us/help-article/job-costing/track-job-costs-quickbooks-desktop/L2X01vi47_US_en_US) 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.

## Related reading

- [Labor Tracking by Cabinet Job and Workstation](https://millbase.ca/blog/labor-tracking-by-cabinet-job-and-workstation)
- [Estimated vs Actual Labor for Cabinet Jobs](https://millbase.ca/blog/estimated-vs-actual-labor-for-cabinet-jobs)

## Definitions and further reference

- [Intuit: job costing and cost records](https://quickbooks.intuit.com/learn-support/en-us/help-article/job-costing/track-job-costs-quickbooks-desktop/L2X01vi47_US_en_US)

## How Millbase can help your shop

### Bring job-cost reviews back to the recorded work

Use [Millbase project tracking](https://millbase.ca/#projects) to keep a cabinet job and its sub-projects together, then compare estimates with recorded labour and material costs. [Insights and reports](https://millbase.ca/#insights) help the team inspect the people and workstations behind a total and export supported results for the next review.

Ask the [Millbase AI agent](https://millbase.ca/#how-it-works) 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](https://millbase.ca/#insights).

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.

## Explore the wider topic

For the broader workflow and decisions behind this guide, read [Cabinet Shop Job Costing: Separate Margin From Markup](https://millbase.ca/blog/cabinet-shop-job-costing-separate-margin-from-markup).

## Frequently asked questions

### Is there one correct burden percentage?

No. The included costs, jurisdiction, employment arrangements, and hour base vary. Validate the model against actual business records.

### Should the rate be identical for every role?

Use a level of detail that supports reliable estimating without unnecessary complexity. Different roles may justify separate rates.