As you can see, remodeling your home is quite the undertaking. The good news is that a lot of the investment can be recouped, which we explain in our article, viewable by clicking here.
The question then is, what is all of this money going towards? The following represent the factors that go into the remodeling cost, from largest to smallest:
- Cabinetry, hardware, and other materials
- Installation (Labor)
- Appliances and ventilation
- Other miscellaneous materials
- Design fees
Unsurprisingly, materials pack the most punch, coming in at the top of the list, followed by labor. To explain why labor is so expensive, it helps to go under the hood of the laborer’s side of business.
By law, workers’ compensation insurance is required for any business with one or more employees that operates within the construction industry. Workers’ compensation insurance can be quite expensive. For instance, roofers’ insurance rates can range between $24 to $80 per $100 spent on payroll. So a paycheck of $1,000 can cost the employer an additional $800 in workers’ compensation insurance. We aren’t fans of it, either. To put that into perspective, a clerical workers’ compensation rate hovers around $0.33 per $100 of payroll.
Insurance rates for construction employees are so high due to the nature of the business. Work-related injuries happen quite frequently, and workers’ compensation protects the employee against lost wages due to workplace mishaps. It helps to know that the people working on your remodeling project are well-taken care of, and if anything does go wrong, they are financially sound.