Why do funerals cost so much? This is one of the most common questions we receive from consumers.
The shock of receiving a huge funeral bill, after saying goodbye to a loved one, can create a terrible amount of unnecessary emotional and financial stress, especially at a time of immense grief.
In order the get a better understanding of what drives the cost of a funeral, this article takes a look at the costs that funeral homes incur in arranging and conducting a funeral.
Note: The following information is of a general nature and does not take into account different business models and corporate ownership models in both metropolitan and regional areas. The best way for consumers to keep costs down is to obtain at least 3 quotes from independent funeral homes before making your final selection.
So, what drives the cost of a funeral?
The costs of organising and conducting a funeral depend on many factors including the range of activities the funeral home undertakes for the consumer, and the consumer’s requirements and preferences for the funeral.
Funeral homes typically undertake some or all of the following tasks when arranging and conducting a funeral:
- collect, transport and care for the body, including embalming if requested
- supply a coffin or casket
- organise cremation or organise purchase of a burial plot and arrange for burial
- arrange the venue, date and time of a funeral service, and a celebrant to undertake it
- arrange floral tributes, newspaper notices, funeral stationery, audio-visual presentations
- complete registration of death and other legal paperwork.
Funeral homes may do all these tasks themselves or may use external providers for some tasks.
Factors that influence funeral costs
Most people are unaware that the above tasks are labour-intensive and it is labour-related costs, funeral products and services and consumer choices that generally drive the cost of a funeral. The following information outlines some of the key factors driving the cost of funerals in Australia.
Employment of staff
According to industry research group IBISWorld, labour-related costs are estimated to represent 34% of the costs of a funeral and are the largest cost category.
Just like any business, the cost of employing staff is one of the biggest costs for funeral homes. They can employ funeral directors and assistants, morticians, vehicle drivers and admin staff. These costs are influenced by minimum employment requirements and conditions under the Funeral Industry Award 2020.
Time spent by staff
Funeral homes usually charge a professional services fee to cover their labour costs. These costs are generally determined by the time spent by staff organising a funeral.
For example, funeral homes can spend on average, around 28 hours of labour organising a single service funeral with a viewing (with a range of 15 to 43 hours).
For ‘bricks and mortar’ funeral homes, overhead cost can be expensive. This includes capital costs associated with buildings (mortuary), vehicles (which may be specially designed) and equipment, as well as rent, utilities, insurance, repairs and maintenance, and administration. Other costs may include land tax, advertising, communications, fuel, general administration, catering, cleaning, repairs and maintenance, uniforms, accounting, auditing and legal services.
Disbursements or Third-party fees
Third party funeral products and services can make up over half the costs for an average funeral. Some of these costs are essential such as the death certificate, and cemetery or crematorium fees, whilst other consumer choices are discretionary.
Consumer’s choices and preferences
Consumer’s choices and preferences are a big driver of funeral costs. This includes optional and discretionary items including viewings, a ceremony, expensive coffins, flowers, mourning vehicles, catering, order of service book, DVD presentations, singers and musicians, funeral releases (doves and butterflies), audio-visual and streaming services.
Cultural and religious requirements
Cultural and religious requirements and practices can also add to funeral costs. A religious funeral can involve a number of ceremonies such as at a church or chapel and at the cemetery. This will usually require additional labour, venue, and transportation costs for the funeral provider. Similarly, the viewings of the deceased at the funeral home and church (or chapel) may also require additional costs.
So how much profit do we make?
There is a common misconception that small independent funeral homes must be making lots of money based on the cost of a funeral. Although the big funeral brands owned by InvoCare and Propel Funeral Partners can make big profits for shareholders, it may not be the same story for your local family owned funeral home.
With the shift towards cremations and government restrictions limiting funeral sizes due to the Covid-19 pandemic, there has been a decline in funeral home profits over the last 5 years.
Support local independent funeral homes
Our members are family owned and independent funeral homes that offer a range of funeral options from direct cremation to traditional funeral services, at an affordable price that’s right for you. For an estimate of funeral prices, simply Request A Quote and see how you can save money today.
eziFunerals supports individuals and families cope with end of life decisions, death and funerals. We are an independent, Australian-owned and operated company. We are not part of any other funeral company.
Our member Funeral Directors operate in Sydney, Melbourne, Brisbane, Perth, Adelaide and Australia wide. They are chosen for their knowledge, quality, service, personalisation and experience. They go above and beyond, and will take the time to support the family.
For more information or to make contact with a trusted Independent funeral director, call eziFunerals on 1300 236 402 or visit www.ezifunerals.com.au.